TORONTO — The Canadian Association of Autonomous Food Sellers is urging the Government-owned corporation responsible for managing dairy supply and pricing to freeze any escalations in milk prices under the strain of political pressure to keep food prices low.Thank you for reading this post, don't forget to subscribe!
The Canadian Dairy Commission evaluates the remuneration paid to dairy farmers for their milk each autumn and declares whether the price will rise or fall the following February.
In a memo on Friday, the commission advised several industry associations that, based on its computations and its poll on production expenses, milk prices at the farmgate level may climb by 1.77 percent in February.
Nevertheless, if one or more of these stakeholders invoke the “extraordinary circumstances mechanism,” the price adjustment will not be determined by a formula but will instead be arrived at through consultation, as stated by the CDC.
CFIG advocated for the activation of that mechanism in a letter addressed to the commission on Friday. Gary Sands, the federation’s senior vice president, wrote that the grocery sector finds itself in an exceptional situation this year.
The food industry is currently under pressure to maintain price stability, as Industry Minister Francois-Philippe Champagne calls on major food retailers to devise plans to ensure price steadiness.
On the previous Thursday, Champagne proclaimed that significant food retailers have committed to offering discounts, price freezes, and price matching.
Sands argued that any early increase in milk prices within the supply chain would counteract the government’s objective of stabilizing food prices.
In the letter, they beseeched the CDC to halt any scheduled price hikes and “engage in further consultations in light of the Government of Canada’s current aspiration to achieve price stability.”
Sands stated in an interview that these rises are particularly arduous for small, autonomous food retailers to absorb without transferring them to consumers.
“Here we are in a time frame where the government has informed the public that we are striving to attain price stability,” he voiced.
“If we want price stability, it must be for all Canadians. Not some Canadians, contingent on where you shop.”
Industry Minister François-Philippe Champagne and Agriculture Minister Lawrence McAuley were carbon copied in the communication. Macaulay’s office verified receipt of the letter, with spokeswoman Anne Cullinan stating that the commission’s process does not determine retail prices. Champagne’s office referred a request for comment to McAuley.
The Retail Council of Canada, comprising large food retailers and one of the stakeholders to receive the memo, declined to provide any statement. Restaurants Canada, also a recipient of the memo, refrained from commenting.
Philippe Charlebois, a spokesperson for the Dairy Commission, conveyed that this memorandum represents the second instance in which stakeholders, as well as the media and the general public, have been apprised of such information, forming part of the Commission’s recent efforts to boost transparency.
Charlebois mentioned that stakeholders have until Friday to decide whether to activate the extraordinary circumstances mechanism, emphasizing that the Commission cannot confirm who, if any, have already chosen to do so.
The commission intends to hold consultations with stakeholders next week, Charlebois disclosed. If the mechanism is implemented, the February price adjustment will be determined through those consultations rather than by the Commission’s formula.
Sands reported that the CDC acknowledged receipt of the letter. He credited the organization for heeding recent appeals for greater transparency in how farmgate prices are established. Furthermore, Sands remarked that this marks the first time CFIG has been informed about the annual dairy price adjustment process.
Last year, the Commission attracted scrutiny when it greenlit an uncommon second upturn in the farmgate price of milk amidst skyrocketing inflation and escalating expenses for farmers.
At that time, industry observers voiced concerns about the opacity surrounding the Commission’s pricing decision-making.
Over the past year, the Commission has engaged in discussions with CFIG to deliberate on the factors underpinning their pricing decisions, with Sands remarking, “They’re continuously making improvements.”
This article by The Canadian Press was initially published on October 10, 2023.
Rosa Saba, The Canadian Press