ONTARIO – Normally price increases on milk are set once per year; however, due to inflation, dairy farmers asked the Canadian Dairy Commission to up the price of milk to offset the burdens of rising prices for fuel, fertilizer, and feed, so dairy farmers can once again afford to see a well-balanced budget this year.
The reason for the increase is partly to offset the increased production cost and ensure producers revenues aren’t affected.
Local dairy farm Bernie Kamphof says, “the increase this time is 1.92 cents per litre. It ends up being 2.5 per cent of the price I get for my milk. Our costs have gone up quite a bit more than that, but this does help. We are thankful we got the increase coming toward to cover some of the cost increases. Like I said it’s going to help, but it’s not going to cover everything. But that’s the story a lot of people are facing and find themselves in right now.”
Kamphof continues to say that right now the increase in fuel is a major problem for his line of work. A lot of the equipment he runs uses to harvest crops and spread manure use diesel fuel to operate.
Additionally, Kamphof states that the price of feed has gone up 40 per cent, therefore, “a two and a half present price increase is welcome but it’s still not going to cover all my costs.”
The Canadian Dairy Commission states in their release, “an important part of the CDC’s mandate is to provide efficient dairy farmers with the opportunity to obtain a fair return for their labour and investment. The CDC, therefore, agreed to review the request to determine if a price increase was warranted before next year.”
However, the price paid to farmers is only part of the price paid by consumers.
There are 25 dairy farms just outside of Thunder Bay, and most of that milk is processed locally.
“When we take a price increase that money is going back into a local economy. We are a local dairy farm. I hire local people. I buy most of my supplies locally, and if I am able to cover my cost that helps other local businesses, said Kamphof.
For instance, Kamphof will go to local businesses for feed, fuel, and maintenance on his equipment.
“What goes around comes around,” add Kampof, “it’s unfortunate times we are in, but we are thankful to be able to take a smaller increase than a lot of other industries are taking.”
In the last five years, the consumer price index for dairy increased by 7.7 per cent. This compares significantly to a 14 per cent increase for meat, a 21 per cent increase for eggs, and a 32 per cent increase for fish.
Next fall, the CDC says there will be another price review and if the market stabilizes, the 2.5 per cent adjustment will be deducted from any adjustment made for Feb. 1, 2023
