Price hike coming for dairy products as dairy commission raises costs

Milk, butter and yogurt prices are likely going to skyrocket in the New Year, after a Canadian Dairy Commission review recommended changes that could take effect February 1.

The cost of milk used in both restaurant and retail sectors will go up by an average of 8.4 per cent, while farmers will also be getting 12.4 per cent more for butter sold to manufacturers.

Just announced last night: Dairy farmers will get 8.4% more for their milk, more than 12% for butter starting February 1 2022. Milk, butter, yogurt prices will likely skyrocket in the new year. https://t.co/HEfkLKaClv pic.twitter.com/Bj7HX2WKIH

— The Food Professor (@FoodProfessor) October 30, 2021

The price increases come as the sector looks to partially offset increased productions costs during the COVID-19 pandemic. The commission says the pandemic caused revenues to remain below the cost of production.

Price hikes will likely be passed on to consumers once approved by provincial authorities at the end of the year, however just how much will vary depending on factors like packaging costs and transportation.

The increase in costs come as the latest consumer price index report from Statistics Canada shows the rate of inflation rose 4.4 per cent in September — the fastest rate of increase since February 2003.

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Statistics Canada says food is the second-largest component of the consumer price index, with Canadians spending about 17 per cent of their expenditures on food from stores and restaurants.

Over the last five years, the consumer price for dairy has gone up 7.4 per cent, compared to 11 per cent for meat and 20 per cent for eggs.

A recent survey from the Angus Reid Institute found the rate of inflation continues to hit many Canadians hard. However, it notes the most economically vulnerable are the most impacted, with 90 per cent of people identifying in this category saying they are struggling to put food on the table.