Retail dairy prices expected to jump as industrial milk rate rises
Ryan Flanagan, CTV Kitchener
Published Wednesday, July 20, 2016 5:20PM EDT
Last Updated Wednesday, July 20, 2016 6:38PM EDT
For the second time this year, the price of industrial milk is on the rise.
The Canadian Dairy Commission is increasing that price by 2.75 per cent as of Sept. 1, on top of a 2.2 per cent increase that took effect in February.
While the price of industrial milk does not directly affect the price of milk at the supermarket, industry experts say other dairy products – including cheese, yogurt and ice cream – will likely get a little bit more costly.
According to the dairy commission, the increase is a move to help dairy farmers, who have been seeing less revenue for their products due to decreasing prices in other parts of the world.
The latest increase works out to about four cents per litre of milk more for producers.
“It makes a big difference for dairy farmers,” said commission spokesperson Chantal Paul.
It also makes a big difference for supermarket owners.
Carmine Caccioppoli, who co-owns the Vincenzo’s grocery store in Waterloo, says his store increased some dairy prices after the February increase, and will try to absorb the September increase without doing the same.
“People blame us for the price increases … so it’s always difficult for us to put prices up,” he said.
Caccioppoli says cheese is one of the products where the increase is most noticeable, with consumers reacting by buying less of it.
“It’s just become a rich man’s product now,” he said.
That’s not the case for Peter Millard, a self-described “cheeseaholic” who estimated that he spent more than $50 on cheese at Vincenzo’s on Wednesday.
“I don’t like price rises – who does? – but if you really enjoy something, you stay with it,” he said.
Rising dairy prices are also a concern for restaurant owners.
Restaurants Canada vice-president Pierre Cadieux says the restaurant industry purchases $2.7 billion worth of dairy products each year, and is “frustrated” at passing price increases on to diners.
He says restaurants owners’ main concern isn’t with farmers, but with the system that regulates dairy prices.
“In a freer international trade environment, in a slow-growth economy, can we afford not to have access to lower international prices?” he said.
Paul says farmers are getting “good news” from other parts of the dairy sector, as Canadian consumers are buying more butter and other products with higher milkfat contents.
Other dairy trends cited by Paul include a long-term increase in the demand for cream, as well as Canadians moving from low-fat yogurts to other varieties.
With reporting by Marc Venema