February 4, 2011

We're getting milked

I've written in the past (click here) about how confusing it was when we first moved to Montreal when it came to buying milk. I had no idea what to do. And I didn't want to ask. Danielle would come home from school and tell me how "it" worked. I have the process covered now, but each and every time I go to the super market it gets me angry. I will never, ever, complain about the price of dairy in the U.S. again. This is crazy! As you can see from the article below, I'm not the only one. The scoop is -- we pay just about $6 a gallon for milk in our area. Yup! And we have to work for it -- putting the darn plastic bags in the pitcher and all that. Really, that's not a big deal, but it's not like we're paying a lot for packaging. 

We've been spending quite a bit of time in the Eastern Townships of Quebec where we ski each weekend. It's a short ride over the border to Vermont. You know how in the U.S. you don't want to do your food shopping at a 7-11 or White Hen because you know you are paying more for convenience? Well, those prices are bargains for us. It's sad when I walk into a Vermont convenience store and feel like I've won the lottery by stocking up on gallons of milk (in plastic containers), chicken, butter and cheese and actually saved money. We always stop at a super market in the U.S. and pick up a turkey or two -- just your average bird can cost $50-$60. Pork is reasonable and then of course there's always rabbit or lamb. (Interestingly, I just read over that post and I thought it was crazy when we were paying 95 cents/litre for gas). Oh, and I can fill up the car with gas on the way home and save a bundle there too -- seriously -- the gas prices yesterday were $1.27 a litre -- with almost four litres to the gallon you can do the math. It's not uncommon for those prices to fluctuate 10 cents/litre from one day to the next so it's a gamble whenever we decide to buy gas in Quebec. We're all about supporting the local economy and all, but this is just crazy.

Quebecers get milked as price increases

Retail price here 40% higher than in rest of Canada

MONTREAL - Quebec families will be hit with higher grocery bills this week, as the retail price of milk increased an average of four cents a litre across the province Monday.
A four-litre package of two-per-cent milk now retails for as much as $7.67 after the increase - significantly more than what consumers pay in other provinces.

While four cents might not seem like a lot, Quebecers have been paying higher milk prices for years and a further increase will put an even bigger strain on consumers' budgets.

Over a year-long period, paying more for milk can have a significant financial impact on a family with growing children.

Canada's Food Guide recommends drinking two cups - 500 millilitres - of milk a day as part of a healthy diet. According to this guide, that would mean a family of four should consume 14 litres of milk per week - or 3 1/2 four-litre bags of two-per-cent milk. At $7.67 per bag, that would work out to a total price of $26.85 per week.

A 2008 Montreal Economic Institute (MEI) study found that a family of four in Quebec paid an extra $300 a year for milk, eggs and poultry as a result of Canada's supply management policies.

Agricultural policy expert Sylvain Charlebois, the author of the aforementioned report, found that the retail price of milk was as much as 40 per cent higher in Quebec than in the rest of Canada.
"Are we penalizing consumers with less means?" asked the associate dean of Guelph University's school of management in an interview. "We are talking about a necessity. For pregnant women, it is really important."

Canada's taxpayer-funded supply management system regulates the production and pricing of milk across the country. Critics argue these policies result in inflated production costs and high retail prices.
A more recent MEI report found the cost of milk production in Canada was the third highest among developed nations, behind only Japan and Norway.

Quebec and Nova Scotia are the only two provinces that regulate the retail price of milk: Nova Scotia sets a minimum retail price; Quebec sets a minimum and maximum retail price.
While consumers deal with the increased price of retail milk; restaurant owners are grappling with a hike in industrial milk prices that took effect Tuesday.

The Canadian Dairy Commission (CDC) has increased the price of industrial milk by 1.5 per cent, to the dismay of many restaurant owners. Industrial milk is used to make cheese, yogurt and ice cream. A price increase means more expensive food staples and increased operating costs for restaurants.

In a recent news release, The Canadian Restaurant and Foodservices Association (CRFA) urged the CDC not to go through with a price increase.

"Record-high dairy prices and low disposable incomes are already driving consumers to choose other menu items in our restaurants," Garth Whyte, president and CEO of the CRFA said in a statement.
"This price increase will drive dairy consumption down even further."
As for the jump in retail milk prices in Quebec, the head of a prominent consumer group said the price hike was unnecessary.

Cran, president of the Ottawabased Consumers' Association of Canada in an interview.
Pierre Nadeau, president of the Conseil des industriels laitiers du Quebec, which represents the interests of Quebec dairy producers, said the price increase was needed to cover the rising cost of producing milk: running the machinery, covering fuel costs and paying salaries to the employees of milk production firms.

He acknowledged that "consumer groups can be upset at an increase in price."

"As a consumer, I can understand," he said.

"There are costs to bring milk to the population and the cost is increasing. The farm costs are increasing. The processing and distribution costs are increasing. We think (the price increase) is justified and maybe they think it is not -that is simply the way it is."

Charlebois said Quebec dairy industry players need to recognize and react to broad changes in the marketplace -such as the fact that Quebecers "are drinking less and less milk."

In the past, milk was an important part of the traditional Quebec diet, he noted.

But Quebec has become much more multicultural and a significant number of today's consumers are from cultures where milk is not an important part of the diet.

As a result, he said, the dairy industry needs to figure out ways to "increase demand" and develop innovate products to attract consumers.
In 2008, Statistics Canada found the average Canadian drank 57.7 litres of milk in a year, a 12.3 litre drop from 70 litres in 1988.



1 comment:

Alan said...

Anywhere in the eastern Canada P5 Milk marketing group with the exception of Ontario which is a member but does not participate in the high price of milk or any form of 'fixing milk pricing' as all the other member Provinces do, we others have milk exorbinately priced to about double the cost in other parts of the world. I know; I recently checked.
UK - HK - Australia - USA and suprisingly the EEC pricing in the UK is the lowest @ $3.30 per 4 ltrs whereas that same amount of milk purchased in my town in Nova Scotia is currently "FIXED" @ $7.79..?? The high price vs. anywhere else in the "WORLD" forces a question other than just simply WHY IS THIS...?? And -
The second question is:- "Where is all that extra money going to..??"
As the process begins and ends in Quebec I suspect at best it is a form of taxation or what else? We are talking here about multiple millions of dollars and it MUST go somewhere - Mmmm..?? Go figure..??

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