The Canadian Dairy Commission (CDC) recommends an 8.4% increase in farm gate prices for milk, a significant increase that is expected to push up the cost of dairy products on grocery shelves in the new year.
The federal crown corporation said the price increase is expected to be approved by provincial authorities next month and take effect on 1er February.
According to the CDC, higher prices for processors will help offset the rise in production costs attributable to the COVID-19 pandemic. Costs associated with feed, energy and fertilizers were all particularly affected, the CDC said, causing farmers’ incomes to fall below their cost of production.
Increased support
The director of the Laboratory of Analytical Sciences in Agri-Food at Dalhousie University, Sylvain Charlebois, pointed out that the price increase was almost twice as high as its previous record of 4.52%, set in 2017.
He said the retail price of milk in grocery stores could increase by up to 10%, while the prices of dairy products, such as butter, cheese and yogurt, could rise by up to 15%.
Meanwhile, the dairy commission says it also recognizes a 5% rise in the costs of processing milk, among other things for packaging, labor and transportation.
To reflect these changes, the CDC has specified that its butter support price for its storage programs will increase by 12.4%.