The Canadian Dairy Commission (CDC) did its annual review of farm gate milk prices in October 2022. The CDC plans to make the following change on February 1, 2023, based on the review and discussions with stakeholders.
The price of milk at the farm gate will go up by 2.2%, which is equal to $0.0174 (less than 2 cents per litre). The National Pricing Formula, a way to set prices that was decided by the industry, is to blame for this increase. It looks at both the costs of making milk for dairy farmers and the consumer price index. As was said in June, the 1 September 2022 increase in the price of milk at the farm level was taken out of the result of the pricing formula.
In the past year, the cost of feed, fertiliser, fuel, and interest rates all went up for producers. Input costs are still going up because of problems in supply chains. But some of these increases were cancelled out by investments and productivity gains on the farm.
Milk, which is used to make dairy products like milk, cream, yoghurt, cheese, and butter, will cost an average of 2.2% more in stores and restaurants. The net effect on consumers will also be affected by things like how much it costs to ship, distribute, and package goods at each step of the supply chain. Only a part of the price paid by consumers goes to farmers.
In the past year, the average annual increase in the consumer price index for dairy products was 6.0%, which was about the same as the increase for all food items, which was 6.3%. Over the past five years, the average annual increase in the consumer price index for dairy was 12%. Compared to this, meat has 21%, eggs have 27%, and fish has 15%.
As of the end of 2022, the new farm milk prices will be official once they have been approved by provincial authorities.
