The price of milk at the farm will increase by 2.2% on 1Ahem February 2023, recommends the Canadian Dairy Commission (CDC). Although minimal, this new increase may have an impact on what consumers will have to pay in the supermarket.
Posted at 13:13
Updated at 6:47 pm
At least that’s what Chantal Paul, director of integrated services for the CDC, acknowledged during a technical briefing with reporters on Tuesday.
But the price increase for consumers should be limited overall. According to the president of Les Producteurs de lait du Québec, Daniel Gobeil, who applauded the CDC’s recommendation, the price of 2 liters of 2% milk sold in grocery store fridges could increase by 4 cents.
In Quebec, the retail price of liquid milk is determined by the Régie des marchés agricole, which is not the case for butter, cheese or yogurt. A hearing on this issue should be held in a few weeks.
For its part, the government body that regulates the price of milk on the farm had given its approval to an increase of 8.4% at the beginning of the year 2022. Then a second 2.5% was announced in September. In the calculations that led to its new recommendation, the CDC took into account the annual variation in production costs (feed, transportation, fuel, fertilizer) and the annual variation in the consumer price index.
“In the last year, growers have been dealing with rising feed costs, fertilizer costs, fuel costs and interest rates,” reads the press release issued by the organization. . In addition, supply chain disruptions continue to push up the cost of inputs. However, investments and productivity gains made on the farm offset some of these increases. »
If this increase is described as “reasonable” by the Council of Dairy Industries of Quebec (CILQ), the association that represents in particular the cheese and yogurt producing companies wonders if its members will be able to “transfer” this increase to the retail cost. . and whether the latter can be applied within a reasonable time, ie early February.
A concern shared by Luc Boivin, general manager of Fromagerie Boivin. “The problem is really the retail margin. »
“We want retail prices to adjust at the same time. Otherwise, the processor absorbs all the costs,” adds Charles Langlois, president and CEO of CILQ.
Adjustment requests must be made several weeks in advance. Mr Langlois points out, however, that the blackoutthis period between the beginning of November and the end of January in which no wholesale price change is accepted – between the supplier and the retailer – could “harm” its members.
“At the same time, with the holidays, retailers won’t be very available to discuss milk price increases. We always lose a few weeks arguing with them. »
Although the CCL has recommended two increases in 2022, the same scenario is unlikely to happen again in 2023, according to Daniel Gobeil. He doesn’t think another raise will be announced in the fall. “The context of 2022 was still exceptional, he maintains. There, we observe greater stability. The main cost of production on the farm is feeding the dairy cows. These costs have stabilized. »
“If we don’t have an exceptional situation regarding production costs on the farm, I don’t see why there would be two adjustments,” he adds.
Additionally, for the first time, the CDC hosted a media briefing to explain its calculation method and reveal the data it used to reach its decision to recommend a price adjustment.
“In recent months, Canadians have made clear calls for the Canadian Dairy Commission to better explain its role, its processes, what it bases its decisions on,” said the organization’s president, Jennifer Hayes. We acknowledge and respect this request for openness and have tried to respond to it. »
Last summer, several industry players said the CDC needed to be more “transparent” to justify its hikes. The Federal Minister for Agriculture, Marie-Claude Bibeau, even saw fit to call the Commission to order for this purpose. “I ask that you provide the necessary leadership for the CDC, consistent with its mandate, to respond to the following priorities: review the CDC’s decision-making process regarding the price of milk and ensure clearer and more transparent communication with Canadian consumers and other stakeholders in the dairy sector,” he wrote in June, in a mandate letter sent to Ms.me There is.
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