WIENS: Setting the record straight on the price of butter

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Although retail prices are now stabilizing across many consumer items, Canadians are still feeling the pinch as the price of many essentials outpaced inflation over the last five years. In this challenging environment, dairy farmers and Canada’s supply management system have become easy targets in debates around food affordability for paid critics.

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The truth is that Canadian dairy farmers, who produce high-quality milk, do not set or have any control over the prices you see at your local grocery store. Instead, they are just one part of a supply chain. In the dairy supply chain, farmers are at the beginning, processors are in the middle, and retailers are at the end. Dairy farmers do not, and never have, set the price Canadians see in the grocery aisle.

The farmgate price of milk – or put simply, the price farmers receive for a litre of their milk – changes once a year as determined by the Canadian Dairy Commission (CDC). The CDC’s pricing formula accounts for factors like national inflation and farmers’ costs of production. This national price is designed to generally keep in pace with the variations in the cost of production, it can go up or down. In fact, the CDC recently announced that the farmgate price of milk will decrease in 2025. This doesn’t automatically result in a reduction for consumers as other actors in the supply chain (processors, distributors and retailers) may choose to adjust the price upwards.

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While the CDC’s support price of processing milk to butter, which directly affects the farmgate price farmers receive, has increased 23.4% since 2019, the increase consumers have seen from milk passing through the supply chain is higher, at 39.2%.

Using consumer pricing as a veiled attack against dairy farmers and supply management undermines our national food security, at a time when Canadians are already feeling the pressures of global inflation. These paid critics choose to purposely ignore that countries without supply management such as the U.S., EU, and Oceania – have seen the price of butter go up respectively by 27.7%, 100.9%, and 47.9%, between 2019 and 2024.

Scapegoating supply management also comes with a hidden cost that these critics always fail to mention: unlike Canada, where dairy farmers receive no direct production subsidies, in many countries where supply management doesn’t exist, dairy production is heavily and directly subsidized. This means that consumers in those countries pay twice for their dairy, once through their taxes and again at the cash register. Using taxpayer money to provide direct subsidies for production is less transparent to consumers, despite what can sometimes be a lower retail price. The true cost is hidden, unlike in Canada’s supply management system.

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Instead of falsely pointing the finger at a system that supports stability and our local economy, we need to acknowledge and address the shared challenges Canadians face, recognizing the critical role supply management plays in ensuring the stability and security of our food system.

The fact that paid critics blame price increases on our nation’s dairy farmers when they continue to offer a globally competitive, homegrown product while protecting our national food sovereignty is not just incorrect – it’s an insult to both farmers and consumers.

– David Wiens is President of the Dairy Farmers of Canada

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