Like everything else at the grocery store, the cost of milk, cheese, yogurt and butter is going to be more expensive in 2022.
That’s because one of the largest hikes in the price of raw milk takes effect at the beginning of February.
The Canadian Dairy Commission recommended a raw milk price hike of 8.4 per cent. The increase, which works out to about six cents more per litre, takes effect in February.
And by the time the packaged and prepared items reach the grocery store, the cost will rise even more.
The commission says the higher price processors will pay, will help offset increased production costs for farmers due to the COVID-19 pandemic.
‘You can’t produce milk and lose money’
In Ontario there are 3,500 dairy farms — all family run, and 75 processing plants that pasteurize and package milk, butter, yogurt and cheese that is sold at retail stores.
Bonnie Den Haan and her family operate Haanview Farm and Sheldon Creek Dairy in Simcoe County.
She also represents the Dairy Farmers of Ontario in Wellington, Dufferin, Peel and her home base in Simcoe.
Den Haan says it’s costing more to run their operation.
“You can’t produce milk and lose money … or you’ll lose your farms. As input prices go up, we have to pay more,” said Den Haan.
“I saw the other day that if you contract to build a new house, you have to pay the [increased] charge or you walk away.”
Murray Sherk is the Chair of the Board for the Dairy Farmers of Ontario. And he is also a dairy farmer at Pinehill Dairy, which is between New Dundee and Plattsville.
He says dairy producers have seen the cost to operate their farms rising over the last two years.
“We’ve seen fuel prices rise significantly in the past year and we also know that, with the pandemic, there’s been a lot of supply chain issues and sourcing,” said Sherk.
“Feed, particularly corn and soybean, would be one of the main components. And those have increased significantly, 20 to 25 percent.”
The grocery store increase
The price increase is based on a study of over 200 farms across Canada. One aspect of the price increase looks at the annual cost of production on each farm.
Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Halifax says the cost increase of raw milk definitely will boost the retail price of finished products.
He says the retail price of milk in grocery stores could increase as much as 10 per cent while prices for dairy products such as butter, cheese and yogurt could soar as much as 15 per cent.
“If you’re having dinner and dairy products are involved, somehow this year is ‘your year’, because next year it’s likely be way more expensive,” said Charlebois.
“We are expecting cheese, yogurt, fluid, milk, anything dairy to be much more expensive next year compared to this year.”