Dairy Farmers of Canada is recommending that the next farm milk price adjustment be postponed due to continued food inflation and pressure on the food industry to stabilize prices.
In a statement posted on its website Friday, Dairy Farmers of Canada president David Wiens announced that the organization is recommending that the Canadian Dairy Commission postpone any milk price adjustments until further notice.
“Dairy producers and their families are also consumers and are suffering from the high cost of food in recent months,” Mr. Wiens said in the press release.
The recommendation comes after the Canadian Federation of Independent Grocers called last week for a pause in any further increases in milk prices.
The Canadian Dairy Commission (CCL) reviews, each fall, the price paid to dairy producers for their milk and announces whether this price will increase or decrease the following February.
This year, the Crown corporation’s calculations determined that prices could increase by 1.77% in February.
However, if one or more stakeholders invoke the “exceptional circumstances mechanism”, as independent grocers have done, the price adjustment will instead be set through consultations.
The Canadian Federation of Independent Grocers was the only stakeholder to invoke this mechanism, CCL spokesperson Philippe Charlebois indicated in an email.
“Thus, the application of the national pricing formula is suspended and the CDC will organize consultations with stakeholders to determine any adjustment to farm prices,” he explained, adding that the results would be communicated no later than 1er november.
Federation Senior Vice President Gary Sands wrote in his letter to the Commission invoking the mechanism that the food industry was in an exceptional situation this year.
The food industry, especially the country’s large chains, is currently under pressure to maintain price stability. Industry Minister François-Philippe Champagne recently announced that major grocers had committed to offering discounts, price freezes and aligned prices after he called on them to develop plans to stabilize prices. price.
In an interview on Monday, Mr. Sands welcomed the call from Dairy Farmers of Canada for a delay in the increase.
“I think they assessed the situation well,” he said. Things are very difficult for Canadians right now, and it is not an appropriate time for this kind of increase. »
While dairy producers support delaying a price adjustment, “I don’t see how the Commission, frankly, could recommend anything other than a pause,” Sands said.
Last year, the CDC approved a rare second increase in farm milk prices, citing rising costs for farmers amid high inflation.
The 2.5% increase in September 2022 came after the farm gate price of milk increased by 8.4% in February of the same year.
In the Dairy Farmers of Canada statement, Wiens noted that the price consumers pay for dairy products is ultimately determined by other players in the supply chain.
“We hope that our decision will encourage these other players to maintain the price of dairy products at their current level,” he said.