In a statement, the Commission blamed inflation. “Producers are facing hikes in feed, fertiliser, gasoline, and borrowing rates,” it stated. In February, the wholesale price of milk and butter paid to dairy quota holders would jump 2.2%.
According to Statistics Canada, total year over year food inflation has averaged 11% every month since August of last year. Last year, check-out costs for dairy items increased by 6% to an average of $6.61 per 500 grammes for block cheese, 11% to an average of $2.81 per litre for milk, 11% to $4.20 per litre for cream, and 22% to $5.50 per 454 grammes for butter.
MPs have stated that the retail price of milk is a source of difficulty for young families. “There are actually parents out there washing down milk,” Conservative MP Philip Lawrence (Northumberland-Peterborough South, ON) said on October 27 in the House of Commons.
Dairy farmers speaking before the Commons budget committee denied profiteering. “Three of the primary production inputs – feed, fertiliser, and gasoline – suffered price rises of 100%, 60%, and 50%, respectively, which is substantially greater than the Consumer Price Index,” Martin Caron, president of Québec’s Union des Producteurs Agricoles, said during a hearing on September 28.
“Keep in mind that the price of agricultural products is only a fraction of the price of food on grocery store shelves,” said Caron, a dairy farmer from Louiseville, Quebec. “For example, in Quebec, less than 38 cents of every dollar spent on beef gets back to the producer. Only 13 cents of every dollar spent on yoghurt is returned to dairy producers.”
Grocery stores have likewise denied profiting. “Many people feel merchants are benefitting from inflation on purpose,” Pierre St-Laurent, CEO of Empire Company Ltd., which controls the Sobeys chain, told the House of Commons agricultural committee on December 5. “I can’t answer for the other stores, but I can promise you that in the case of Empire, this is entirely wrong.”
According to St-Laurent, federally controlled milk price rises are appropriate. “It appears that the Canadian Dairy Commission has been exposed to all the justifications required for a price rise,” he added. “Three successive hikes have been permitted for reasons that I believe are appropriate.”