Household budgets take another hit, with increase to price of milk

Dairy farmers across Canada are getting a little more help with an increase in the price of milk after struggling this year with higher operating costs caused by inflation.

But consumers are feeling the squeeze of yet another increase to the cost of living. On Thursday, the farm gate price of milk the price paid to producers went up 2.5 per cent, about two cents per litre.How much more consumers will pay could vary, depending on how the price increase is handled in the supply chain on the milk's way to store shelves. It's the second increase to the price of milk this year, following a hike of six cents per litre in February.

Soyna Smith, executive director of the Single Parent Association ofNewfoundland, says the rising cost of living already has parents struggling with budgeting, and an increase in milk is another stressor.

"Any slight increase in any produce, of course, has an impact in our single-parent families. For a family who is living on one income, it's difficult," Smith told CBC News on Friday.

"Single-parent families will find the increase in the cost of milk difficult to factor into their monthly budgets."

Smith said her organization serves around 200 single-parent families a month at its food bank.

Thursday's price increasefulfils a request by advocacy groupDairy Farmers of Canada in May. The Canadian Dairy Commission theregulators of Canada's dairy supply management approved the increase in June.Thursday's increase follows a six-cent increase that happened in February.

'Bad year' for farmers

ForCrosbie Williams, a fourth-generation farmer atPondview Farms in the Goulds area of St. John's, the 2.5 per cent increase on milk won't make much of an impact on his bottom line.

Speaking to CBC News in May, Williams said many farmers were concerned they would lose their livelihoodsas costs of business were skyrocketing. Feed increased 35 per cent, additivesincreased 50 per cent andfertilizer 85 per cent with theCOVID-19 pandemic and the Russian invasion ofUkraine being the driving forces behind the spike.

On Friday, Williams saidbusiness costs haven't changed much since May. The cost of feed has dropped slightly but it's still about 22 per cent higher than last year, he said.

"Cost recovery this year, to be quite honest, is non-existent. It's going to be a bad year when the books are done," said Williams.

"The price increases at the retail level for consumers, it doesn't recoup what the input costs this year have been. All our variable costs are up but ourfixed costs are as well."

Williams said most in the food production industry are struggling this year and 2022 will be remembered as "an anomaly."

He said he has never experienced two milk price increases in one year over the span of his multi-decade career but also has never seenhigherproduction costs. His farm is situated on 325 acres of land andhouses 250 cows.

"Dairy farmers in our province, we have to endure the highest costs of production in all of North America," said Williams.

"All of our farmers are wondering where the light is at the end of the tunnel."

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