Milk prices are due to increase by 8.4 per cent next month and butter prices by 12.4 per cent on Feb. 1.
The Canadian Dairy Commission cited rising production costs as the reason for the steep price increases. Usually annual adjustments have been about two per cent.
Leila Sarangi of Campaign 2000 to end child poverty said the increase will be difficult for low-income families. She said the dairy commission should take family situations into consideration, not just production costs.
Olivier Bourdeau, vice-president of Restaurants Canada, said “restaurants will close because of this. This will be a knockout blow.”
He said about 12,000 restaurants have closed since the Covid-19 pandemic spread across Canada.
The Canadian Dairy Commission influences markets by setting a target price for milk and then offering to buy butter and skim milk powder to support that milk price target.
Provincial marketing boards have more direct control over milk pricing.
The provinces have sole jurisdiction over fluid milk pricing; the Canadian Dairy Commission’s role is limited to milk for processing into dairy products such as cheese and butter.
The provincial marketing boards have almost always taken their lead from the Canadian Dairy Commission in setting prices for milk used for processing.
