The expected increase in the price of milk at the farm, of 2.5% on September 1, will have an impact right up to the grocery store shelves.
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“If we are talking regarding a 2.5% increase at the farm, we risk seeing the price of retail dairy products increase by at least 6 to 7% in September”, warned Sylvain Charlebois, director of the Laboratory of Analytical Sciences in Agrifood from Dalhousie University.
Dairy processors, however, will bear part of the increase, but not all of it.
“The challenge, and it’s an important question, is how to adjust retail prices in a reasonable way,” explained the CEO of the Council of Quebec Dairy Industrialists, Charles Langlois. On the one hand, I have to be able to assume (at least) a part. At the same time, we must preserve the consumer’s ability to buy our products.”
If you think it will only be the price of milk that will increase, think once more! All dairy products will be impacted!
“If we don’t increase our prices, it’s the cheese maker who reduces his profit margins,” explained the president of Fromages CDA, Daniel Allard. So if we want to continue to evolve and develop, we have to adjust accordingly according to the operations of each cheese dairy.”
“If the cost of inputs is affected upstream in the chain, possibly at the retail level, we are affected more. It’s a bit like a whiplash. When you send a shot, the difference is not huge, but in the end, at the end of the line, the difference is much greater. That’s kind of how supply chains work,” added Mr. Charlebois.
For their part, Les Producteurs de lait du Québec insists that it is the retailers who set the retail prices of dairy products (with the exception of milk), and not the producers. It now remains to know the exact increase that will be passed on to consumers. Discussions are still ongoing between dairy manufacturers and retailers.
