Allison Ellis, Chair of Marketing Council, today announced that the minimum home delivery price of fluid milk and cream products will increase by five cents a litre on February 1. At the same time, minimum wholesale prices of fluid milk products will increase four cents a litre and minimum fluid cream wholesale prices will increase three cents a litre.
Fluid milk products include homogenized (standard) milk, 2% milk, 1% milk, skim milk and chocolate milk. Fluid cream products include blend, table cream and whipping cream.
“Producers will receive approximately 2.3 cents per litre of the increase while processors will see their average margins increase by about 2.0 cents a litre,” said Mr. Ellis.
Mr. Ellis said that in establishing the producer price, the Marketing Council took into account producer cost of production data for 2004, indexed to the end of September 2005, and a decision of the Canadian Dairy Commission to adjust the Federal Target Support Price to provide 50 per cent of producers in Canada an opportunity to receive their cost of production.
The processor margin increase is based on processing, packaging and delivery costs reported to the Marketing Council by processors during 2004 compared to 2003, plus an allowance for increased energy costs during 2005. Mr. Ellis said that increased fuel costs contributed to the council’s decision to raise home delivery prices by one cent a litre more than wholesale prices.
“Prices established by Marketing Council are minimum prices,” said Mr. Ellis. “Processors and distributors may sell their products above the minimum prices if they wish.” He said that retail (store) prices are not regulated.
A full schedule of prices will be published in the Royal Gazette.
Marketing Council is a statutory body established under the Natural Products Marketing Act. Among other things, Marketing Council has been granted authority under the act to establish the producer price for Class 1 milk, and minimum wholesale and home delivery prices.