Third increase to Canadian dairy prices in a year takes effect

Dairy prices rising, but little benefit for farms Shoppers should soon expect to dig a little deeper into their wallets to pay for milk, cheese and butter.

Beginning Thursday, Canadian dairy farmers will be charging an increased price for their products.

The Canadian Dairy Commission implemented a 2.2-per-cent increase to the "Farm Gate Milk Price" on Wednesday.

Fraser Valley dairy farmer Grant Bouwman says the increase will be miniscule for his overall business.

"Will this help? Yeah, every increase helps. But will it cover it all off? No,” said Bouwman. "The cost of producing in agriculture everywhere has increased so much, the cost of fertilizer, fuels, labour."

The increase equates to roughly two cents extra per litre for farmers.

"Our prices just continue to go up and we're not making money, we're just trying to keep going and survive," said Bouwman.

The survival mindset is something many shoppers can relate to at the grocery store.

"We'll expect to see higher dairy product prices in 2023,” said professor Rick Barichello of UBC's Food and Resource Economics department.

Barichello warns shoppers the dairy increase will have a trickle-down effect on the sticker at the store for items like cheese or yogurt.

"It's really unusual to see our grocery prices go up at this pace, and especially to have had it increase so quickly," he said.

The increase is the third hike in the last year. The price of milk has gone up a total of 13.1 per cent since last February.

But that total reflects only the rise in compensation for farmers.

"The total price of a dairy product you pay at a store is not reflective – well (it's) somewhat reflective – but there is transportation, processing, there's a lot of other things that affect the price besides what we get at the gate,” said Holger Schwichtenberg, the chair of BC Dairy.

“Based on where we’ve gone in the last year with all the increases in the feed, fuel, fertilizer and interest and all that, it fills the gap a little bit,” said Schwichtenberg. "So this helps, but are we out of the woods yet? No, I don’t think we are.”