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Andrew McClelland
The Advocate

Local Journalism Initiative

February marks the first month that the farm gate milk price, as set by the Canadian Dairy Commission, takes effect, raising the cost of milk used to make dairy products for the retail and restaurant sectors by 8.4 per cent.

In October of 2021, the increase was announced by the CDC, which explained that the “increase in producers’ revenues will partially offset increased production costs due to the COVID-19 pandemic which caused revenues to remain below the cost of production.”

During the past two years, feed, fertilizer and energy costs have been impacted by the pandemic, making it harder than ever for Canadian dairy farmers to make ends meet and cover their cost of production.

The farm gate milk price will increase by $6.31/hl, or 6 cents per litre, but many consumer advocate groups have noticed that the actual increase on grocery store shelves reflects even higher increases as supermarket chains pass the price hike along to the consumer.

In Toronto, the price of a four-litre jug of two-per-cent milk jumped to $5.39 from $4.69 at Loblaw’s stores, representing a 14.9-per-cent increase. In Alberta and B.C., the same product jumped to $5.39 from $4.65, a 15.9-per-cent increase.

The CDC says that the impact of its adjustments on retail prices always depend on many factors such as manufacturing, transportation, distribution and packaging costs throughout the supply chain, but that its 8.4-per-cent increase is meant to offset dairy producers’ cost of production.

The commission notes that in the past five years, the consumer price index for dairy increased by 7.4 per cent, which compares to 11.8 per cent for meat, 20.6 per cent for eggs and 7.7 per cent for fish.

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