The Canadian Dairy Commission (CDC) conducted the annual review of Canadian farm gate milk prices. As a result of the review, the CDC intends increase by 2.2 per cent which translates to $0.0174 (less than 2 cents per litre).
This increase is the result of the National Pricing Formula, a pricing mechanism that was determined by the industry. It considers dairy farmers’ costs of production as well as the consumer price index.
In the last year, producers faced increases in feed costs, fertilizer costs, fuel costs, and interest rates. Disruptions to supply chains continue to put upward pressure on input costs. However, investment and productivity gains at the farm offset some of these increases.
The net impact on consumers will also be influenced by factors such as transportation, distribution and packaging costs throughout the supply chain.
In the last year, the average annual consumer price index for dairy products increased at a comparable rate (6.0 per cent) to all food products (6.3 per cent). In the last five years, the average annual consumer price index for dairy increased by 12 per cent.
The new farm milk prices will become official once they are approved by provincial authorities later in 2022.
