Food manufacturers demand freeze in milk prices

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Related tags: Manufacturing, Industry

In a bid to provide a wide range of dairy products at competitive
prices, food manufacturers in Canada are demanding a freeze on the
price for industrial milk.

In a bid to provide a wide range of dairy products at competitive prices, food manufacturers in Canada are demanding a freeze on the price for industrial milk, the Food and Consumer Products Manufacturers of Canada (FCPMC) confirmed this week.

This view is the result of recent FCPMC talks with the Canadian Dairy Commission (CDC) to discuss the annual review of industrial milk prices.

"FCPMC is gratified that the CDC heard our message and, as a result, we hope there will be restraint placed on price increases this year,"​ said Laurie Curry, Vice President of Public Policy and Scientific Affairs, FCPMC.

According to the trade association economic indicators and dairy industry trends suggest that a price increase could not be supported at this time. Since 1994, the consumer price index (CPI) has seen an average annual increase of 2 per cent while the cost of industrial milk has skyrocketed by over 20 per cent, representing a 3 per cent average annual increase.

"This increase is completely unjustified since the producer's cost of production (COP) has fallen by an average of -1 per cent per year,"​said Curry. "Our members have been forced to absorb recent increases in the price of industrial milk, since our retail and foodservice customers have made it very clear that they are feeling consumers' resistance to any price increases in our uncertain economic climate."

The association maintains that the Canadian processing industry continues to do its part to foster growth in the industry by eliminating costs from the system, and by focusing its efforts on innovation and productivity as core strategies to deliver added value to consumers.

"If prices remain stable, companies are much more likely to invest in R&D for new product development, which may result in increased consumer demand and real growth,"​ said Curry. "As well, stable prices will encourage Canadian manufacturers to continue using industrial milk instead of finding non-dairy substitutes and to source dairy ingredients locally for the products they export."

According to estimates from the Department of Foreign Affairs and International Trade, use of imported materials for production of exported goods has increased by over 60 per cent in the last couple of years.

FCPMC represents over 165 Canadian-operated member companies that manufacture and market food and consumer products. The food and beverage manufacturing industry contributes 12.1 per cent (over €10.7 billion) of the Manufacturing Gross Domestic Product, and purchases 35 per cent of Canadian agricultural products.

Related topics: Markets, Pricing Pressures, Fresh Milk

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