Dairy Prices during the Pandemic

Pierre Lampron, president of Dairy Farmers of Canada, wrote on November 8th that “The Canadian Dairy Commission (CDC) recently announced an increase in the farm-gate prices for milk and butter, to be implemented shortly.” He adds, “This increase will not completely offset dairy farmers’ rising costs, and that is something farmers will have to deal with. However, let’s call a spade a spade here: nobody is looking to take advantage of consumers, but all Canadians lose if our farmers are put out of business because they can’t keep up with inflation.”

University of Guelph food economist  Michael von Massow explains “We expect meat prices to go up. We expect grain products, bread and pasta to go up. We expect fresh produce to go up through the winter, all for a variety of reasons, but none of those have organizations that announce those price increases, so it looks like dairy is an outlier here, but the truth is, it isn’t.”

“As a consumer, I wish that I had as much transparency for the other food products I buy as I have for dairy price adjustments at the farm gate,” Lampron writes. “When was the last time a retailer consulted you on a price increase and explained the reasons for the higher price?”

Low-income advocates also say the recent record-breaking price hike will hurt consumers who are already struggling with rising costs, according to Global News. “It is very, very regressive,” said Dr. Lynn McIntyre, professor emerita of community health sciences at the University of Calgary. “This increase is actually in the midst of many other food increases … These very vulnerable families are going to be drowning in increased prices in terms of trying to figure out how to provide a healthy diet.”

Pierre Lampron estimates “That if the full cost of the farm-gate increase were to be passed on to them in a restaurant, it would translate to a $0.01 increase in the price of a glass of milk or $0.04 more for a medium pizza. At retail, it would mean just $0.12 more for a 650-gram tub of yogurt and $0.26 more for a 450-gram package of cheddar cheese.”

“What we’re noticing here is, yep, it’s a really big bump in dairy prices, one that we’re not used to seeing,” von Massow told Financial Post. “But if we look at some of the underlying reasons for why that might happen, even without the detailed cost of the production model, it’s not a huge surprise for me.”

Pierre continues, “affordability is a significant issue, but it is also important for Canadians to keep in perspective the details of how and why prices are set as we all work together to recover from COVID-19. Rest assured, dairy farmers are committed to continuing to produce high-quality milk for all Canadians and contributing to a strong economic rebound in the coming months and years.”

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