Household budgets take another hit, with increase to price of milk

·3 min read
Milk prices have risen across Canada.  (Mike Moore/CBC - image credit)
Milk prices have risen across Canada. (Mike Moore/CBC - image credit)
Mike Moore/CBC
Mike Moore/CBC

Dairy farmers across Canada are getting a little more help with an increase in the price of milk after struggling this year with higher operating costs caused by inflation.

But consumers are feeling the squeeze of yet another increase to the cost of living. On Thursday, the farm gate price of milk — the price paid to producers — went up 2.5 per cent, about two cents per litre. How much more consumers will pay could vary, depending on how the price increase is handled in the supply chain on the milk's way to store shelves. It's the second increase to the price of milk this year, following a hike of six cents per litre in February.

Soyna Smith, executive director of the Single Parent Association of Newfoundland, says the rising cost of living already has parents struggling with budgeting, and an increase in milk is another stressor.

"Any slight increase in any produce, of course, has an impact in our single-parent families. For a family who is living on one income, it's difficult," Smith told CBC News on Friday.

"Single-parent families will find the increase in the cost of milk difficult to factor into their monthly budgets."

Smith said her organization serves around 200 single-parent families a month at its food bank.

Thursday's price increase fulfils a request by advocacy group Dairy Farmers of Canada in May. The Canadian Dairy Commission — the regulators of Canada's dairy supply management — approved the increase in June. Thursday's increase follows a six-cent increase that happened in February.

'Bad year' for farmers

For Crosbie Williams, a fourth-generation farmer at Pondview Farms in the Goulds area of St. John's, the 2.5 per cent increase on milk won't make much of an impact on his bottom line.

Speaking to CBC News in May, Williams said many farmers were concerned they would lose their livelihoods as costs of business were skyrocketing. Feed increased 35 per cent, additives increased 50 per cent and fertilizer 85 per cent with the COVID-19 pandemic and the Russian invasion of Ukraine being the driving forces behind the spike.

Darryl Murphy/CBC
Darryl Murphy/CBC

On Friday, Williams said business costs haven't changed much since May. The cost of feed has dropped slightly but it's still about 22 per cent higher than last year, he said.

"Cost recovery this year, to be quite honest, is non-existent. It's going to be a bad year when the books are done," said Williams.

"The price increases at the retail level for consumers, it doesn't recoup what the input costs this year have been. All our variable costs are up but our fixed costs are as well."

Mike Moore/CBC
Mike Moore/CBC

Williams said most in the food production industry are struggling this year and 2022 will be remembered as "an anomaly."

He said he has never experienced two milk price increases in one year over the span of his multi-decade career but also has never seen higher production costs. His farm is situated on 325 acres of land and houses 250 cows.

"Dairy farmers in our province, we have to endure the highest costs of production in all of North America," said Williams.

"All of our farmers are wondering where the light is at the end of the tunnel."

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