The Canadian Dairy Commission (CDC) has once again raised its support prices for dairy products. Hikes for skim milk and butter prices are to come into effect Sept. 1and will boost farmers revenues by $1.45 per hectolitre of industrial milk. Industrial milk is used to make cheese, butter, skim-milk powder, and yogurt; it is also used as a benchmark by provincial marketing boards to set the price of fluid milk sold in stores to consumers.
The CDC usually waits until December to announce price changes but it couldnt wait this year because dairy farmers were complaining about rising fuel, fertilizer and other input costs. We might initially feel sympathy for dairy farmers plight but Canadian dairy prices are already among the highest in the world — two to three times the averageaccording to the Organization for Economic Cooperation and Development.
We might also ask this question. When times were good, were prices ever lowered? The answer is no. As the Canadian Restaurant and Foodservices Association (CRFA) notedin 2006, the cost of producing milk fell 3.8% over the previous 12 years while the price of milk went up 53%. The CFRA further noted that Statistics Canada data showed dairy farms enjoyed an average profit margin of 25%, nearly twice the average farm operation.