Household budgets are again affected, with the rise in the price of milk

Milk prices have increased across Canada. (Mike Moore/CBC)

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

But consumers are feeling the pressure of a further rise in the cost of living. On Thursday, the price of milk on the farm – the price paid to producers – rose 2.5%, or about two cents per litre. The extra amount consumers will pay could vary depending on how the price increase is managed in the supply chain on the milk’s journey to store shelves. This is the second increase in the price of milk this year, following an increase of 6 cents per liter in February.

Soyna Smith, executive director of the Single Parent Association of Newfoundland, says the rising cost of living is already making it difficult for parents to budget and that increased milk supply is another stressor.

“Any slight increase in any product, of course, has an impact on our single-parent families. For a family living on one income, it’s tough,” Smith told CBC News on Friday.

“Single-parent families will find it difficult to incorporate the increased cost of milk into their monthly budget.”

Smith said his organization serves about 200 single-parent families per month in its food bank.

Thursday’s price increase responds to a request from advocacy group Dairy Farmers of Canada in May. The Canadian Dairy Commission — Canada’s dairy supply management regulators — approved the increase in June. Thursday’s increase follows a six-cent increase in February.

“Bad year” for farmers

For Crosbie Williams, a fourth-generation farmer from Pondview Farms in the Goulds area of ​​St. John’s, the 2.5% increase in milk won’t have much of an impact on his bottom line.

Speaking to CBC News in May, Williams said many farmers fear losing their livelihoods as business costs soar. Animal feeds were up 35%, additives up 50% and fertilizers up 85%, with the COVID-19 pandemic and the Russian invasion of Ukraine driving the surge.

Dairy farmer Crosbie Williams says rising costs of doing business through 2022 means cost recovery is “non-existent”. (Darryl Murphy/CBC)

On Friday, Williams said business costs haven’t changed much since May. The cost of feed has fallen slightly, but is still about 22% higher than last year, he said.

“Cost recovery this year, to be completely honest, is non-existent. It’s going to be a bad year when the books are done,” Williams said.

“Prices are going up at the retail level for consumers, that’s not recouping what input costs have been this year. All of our variable costs are up, but so are our fixed costs.”

Williams said Thursday’s price increase would not recoup this year’s trading costs. (Mike Moore/CBC)

Williams said most players in the food production industry have been struggling this year and that 2022 will be remembered as “an anomaly”.

He said he had never seen two milk price increases in one year in his decades-long career, but he had never seen higher production costs either. His farm is situated on 325 acres of land and is home to 250 cows.

“Dairy farmers in our province face the highest production costs in all of North America,” Williams said.

“All of our farmers wonder where the light is at the end of the tunnel.”

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