Dairy farmers have won a rare mid-year price hike to address rising costs of production, but it falls short of what’s needed to keep pace with inflation.
The Canadian Dairy Commission approved a 2.5% increase in the farmgate milk price this week in response to a request the Dairy Farmers of Canada made at the end of May for a review what producers receive.
“[Dairy farmers] are facing never-before-seen price increases for the goods and services they need to produce milk,” DFC said in a statement regarding the request. “The upward pressure on costs is expected to continue.”
DFC cited increases of 32% in fuel costs and 8% for feed but Canadian Dairy Commission statistics painted a more dire situation, estimating that fuel had increased 55% and feed was up 22% over the past year.
The price increase follows an 8% increase that took effect in February. It serves as an advance on the next annual increase in pricing, set to be announced later this year.
That’s good news for BC dairy farmers, says Sarah Sache, a farmer in Rosedale who serves as vice-chair with the BC Dairy Association.
“This is a necessary change to keep our businesses operating in the current economic climate,” she says. “It certainly helps us to stay in business right now.”
Sache says fuel and fertilizer costs on her farm have doubled over the past year while feed costs have increased in the range of 30% to 40%, depending on how rations are mixed.
“We couldn’t wait for an annual review in this situation,” she says while noting, “We’re still going to need more.”
The price increase takes effect September 1. While it will draw the ire of those critical of supply management, the Canadian Dairy Commission notes that other farm products have seen sharper increases than dairy.
According to Statistics Canada, the average retail price of dairy products increased 16.6% while chicken prices increased 21.5% and eggs increased 30%.