With food costs having risen rapidly over the last two years, Canada’s national dairy farmer organization is recommending the Canadian Dairy Commission (CDC) hold off on increasing the farmgate price of milk in 2024.
The CDC reviews dairy farms’ cost-of-production data annually to calculate the price to be paid to dairy producers the following year. Based on 2023 costs, the Crown corporation’s routine math would support a price increase of 1.77 per cent as of February 1, 2024, but Dairy Farmers of Canada (DFC) is recommending the adjustment be delayed.
“Dairy farmers and their families are also consumers and experience the high cost of food these days. Recognizing the current level of food inflation and in solidarity with all Canadians, we have recommended the Canadian Dairy Commission delay its application of the price adjustment on milk until further notice,” said DFC president David Wiens, in a statement last week.
“That said, the price consumers pay for dairy products is ultimately determined by other players in the supply chain. Our hope is that our decision will result in other actors maintaining the price of dairy products at a time when food inflation hovers around nine per cent,” noted Wiens, who farms in southeast Manitoba.
After releasing its 2023 cost-of-production survey results on October 6, the CDC also received a request from the Canadian Federation of Independent Grocers to invoke what’s called the “Exceptional Circumstances” process.
As a result, the routine price-setting process has been suspended, and the commission will be meeting with stakeholders between Oct. 17 and 23 to determine the price adjustment for February 1, 2024. The stakeholders include Dairy Farmers of Canada, Dairy Processors Association of Canada, Consumers’ Association of Canada, Retail Council of Canada, Canadian Federation of Independent Grocers and Restaurants Canada.
The CDC says it will communicate its decision no later than Nov. 1, 2023.
A year ago, the commission announced a 2.2 per cent increase for February 2023, which was implemented.