Newspaper article The Canadian Press

Editorial Exchange: Dairy Commission Leaves Sour Taste

Newspaper article The Canadian Press

Editorial Exchange: Dairy Commission Leaves Sour Taste

Article excerpt

Editorial Exchange: Dairy commission leaves sour taste

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An editorial from the Winnipeg Free Press, published July 21:

The world is enjoying an abundant supply of industrial milk products this year. Butter fat and milk powder used for production of ice cream, yogurt and other such products are piling up in the greatest dairy-producing countries -- Europe, Australia, New Zealand, the United States and Argentina -- and world prices have dropped.

You might think Canadian consumers would share in this abundance and look forward to stable or declining prices for dairy products in their grocery stores, but you would be wrong. The Canadian Dairy Commission, an Ottawa agency that helps run Canada's dairy industry, has decreed an increase in industrial milk prices effective Sept. 1. This comes on top of the usual Feb. 1 price increase.

The dairy commission was created half a century ago, in 1966. It is easy to forget, in this post-Soviet, market-driven time, that Canada still clings to holdovers from the era of five-year plans and administered prices. Administered price decisions are difficult to make and sometimes, as the dairy commission showed last week, still more difficult to explain.

The dairy commission announced on July 15 that it was raising the price of butter to $8.0062 per kg from $7.7815 per kg. The price of skim milk powder, meanwhile, would rise to $4.5302 per kg from $4.4176 per kg. These are the prices that cheese makers, yogurt makers and other dairy processors will pay to dairy producers. Processors and retailers may absorb these increases, may top them up with further increases or may pass them straight through to consumers, so it is not immediately clear what results will follow at the grocery store checkout counter.

The dairy commission reasoned that dairy farmers last year suffered a decline in their revenue because industrial milk exported by Canada has been fetching lower prices than the regulators had been expecting. …

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