Towards a second increase in the price of milk this year

Pressure is mounting for milk producers to be granted a second price hike this year, which almost never happens.

“It’s important, it will allow them to get through the current situation,” summarizes the spokesperson for Quebec Milk Producers, François Dumontier.

Cost of inputs rising

If people find that everything costs more, it’s the same thing with Quebec farmers. Between July 2021 and March 2022, the price of fertilizers increased by 44%, that of fuel by 32% and that of animal feed by 8%.

“Currently, the price they receive does not capture what is happening with the inputs,” he adds.

An 8.4% increase in the price of milk — about $0.06 per liter — has already come into effect on 1^er last February.

Last week, the Dairy Farmers of Canada (DFC — there are about 10,000 — asked the Canadian Dairy Commission (CDC) to authorize a second.

The CDC will consult with retailers and consumers June 13-15 and issue its decision shortly thereafter. The increase, if authorized, will come into effect on 1^er september.

It will be deducted from that which would normally have been authorized in the fall to come into force on 1^er February 2023.

“It’s more like an advance because of the dramatic increase in costs,” explains Lucie Boileau, spokesperson for Dairy Farmers of Canada.

Intermediaries benefit

In the end, we can wonder how much the liter will increase by 2%, because it is not the producers who set the price of milk.

“Each time the CDC authorizes an increase, the companies benefit,” assures Gary Sands, of the Canadian Federation of Independent Grocers.

He will also be before the CCL on June 15. “It’s still a double increase. First the normal one, then the one where they benefit from it, ”he summarizes.

When the CDC approved the 8.4% increase last October, Lactalis – Lactancia and Beatrice – reacted five days later by informing all of its customers of an increase of “up to 15%”.

In a 2 L carton that we are sold for $3.78, recalls François Dumontier, the milk only accounts for 54% of the price ($2.03). The rest goes to the retailer and processor.