Canadian Dairy Commission: Prices for industrial milk will remain the same in 2010

OTTAWA—Prices for industrial milk will remain the same in 2010, following a decision by the Canadian Dairy Commission not to reduce the cost.

The CDC’s cost for butter is to stay at $7.1024 per kg, a price used as a benchmark by provincial bodies tasked with setting selling costs of industrial milk, which is used in the production of cheese, ice cream, butter and yogurt.

In a statement, the head of the CDC, chairman Randy Williamson, said demand for dairy products in Canada remained stable in 2009, even with the state of the economy.

"Input prices have decreased slightly from their peak levels in 2008 which now allows dairy producers to cover their cost of production. As a result, the support prices for butter and skim milk powder have been left unchanged," Williamson said.

The CDC said demand for milk and milk products increased by three per cent in 2008-09, to 50.04 million hectoliters.

“Leaving the support prices unchanged will contribute towards maintaining or improving this trend,” said the CDC’s statement.

Canadian Restaurant and Foodservices Association president Garth Whyte disputes the status quo price, suggesting that the cost of industrial milk production dropped by almost two per cent in 2009.

“The decision by the CDC to keep dairy prices artificially high does nothing to reverse a long-term trend of falling demand for dairy products,” Whyte said, in a statement.

“The CDC is pricing dairy right off our menus. Year after year the CDC forces Canadians to swallow price increases when production costs go up, but they refuse to pass along the savings when production costs go down."

Whyte said Canadian industrial milk prices have jumped by 60 per cent overall during the last 15 years, making the cost here among the highest in the world, according to the CRFA.

Whyte wants the CDC to rollback the cost of industrial milk by 16.5 per cent to bring it back in line with the Consumer Price Index.

The CRFA addressed the CDC during hearings in Ottawa last week.
Source: http://can-restaurantnews.com/content/publish/national/Milk_prices_are_status_quo_in_2010.shtml