"> Farmgate milk prices to rise: how will this affect my grocery bill? - eDairyNews-EN
Farmgate milk prices are expected to increase by six cents per litre on February 1.
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Production costs for dairy farmers have increased, leading to the farmgate milk price rising by six cents

While it’s yet to be seen how this translates to the bill on grocery shopping, it’s welcome news for dairy producers.

The increase comes following the annual cost-of-production study done on dairy farms across Canada by the Canadian Dairy Commission.

Matt Flaman, chair of the Sask Milk board and a dairy farmer in the Vibank area, said he doesn’t expect consumers to notice much of a change.

“We don’t establish the price at the other end. Obviously processors and retailers may pass some of that on to consumers, but when you’re looking at what the consumers will see, it’s very little compared to what the impact would be on a farmer. You’re looking at pennies increase on a block of cheese and things like that. But per litre on the farm, or hectolitre, it’s quite significant for us.”

Flaman doesn’t expect any more money going into dairy farmers’ back accounts. He said the increase will help farmers as a number of factors, notably drought, have increased their costs.

“A lot of that gets eaten up by various things that have risen over time. For example, cattle feed, fuel, machinery costs, seed, fertilizer, et cetera. That’s all gone up. But I don’t know if there’s any extra profitability for farms, but I think it’ll help look after the added cost that we’ve had over the last year or two.”

He added that this increase is a little more than a typical year.

“There are two factors to that. Number one is that we only adjust our price once a year, and this particular time the cost that farmers are incurring has gone up a little quicker than normal. And really up until now we’ve had really small, incremental price increases over the last number of years. So maybe we were a little bit behind on our prices based on the cost of production.”

Overall, Flaman said the dairy farmers and the agriculture sector as a whole are hopeful as they look ahead.

“I think it’s like every agriculture sector. We’re always very optimistic people, and this price increase will be very welcome by farmers, obviously. But I think we all know there are some challenges with drought and things like that within our region that are also putting challenges to our farmers that we’ll have to work our way through. I think as a group, we’re a very optimistic group. We’ll face challenges head on, and I think there’s always one of those things in the farming world that there’s always next growing year. I think that’s what we’re looking forward to in our – not just the dairy world, but I think the whole ag sector.”

Fonterra has developed an innovative process for recycling water removed from milk during the evaporation process at its Maungatūroto site. The water passes through a wetland which acts as a natural bioreactor before it is treated further on site.

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