Effective Feb. 1, the CDC raised the regulated skim milk powder price to $5.921 per kilogram, up from $5.833, but left unchanged the support price for butter, which remains at $6.869 per kilogram.

In this province, the change translated into a net increase of about two per cent — or 1.5 cents per litre — in the overall milk price paid to producers, according to the Dairy Farmers of Ontario.

The CDC’s latest hike amounts to half the inflation rate and follows a five-year period, ending 2006, in which support prices gradually rose to reach "cost of production" for 50 per cent of the country’s dairy farmers, said Dairy Farmers of Canada executive director Richard Doyle.

"I think clearly, we’ve gone through five years of catching up," Doyle told The AgriNews Feb. 21, though he added the conclusion of that exercise shouldn’t preclude new increases such as the one imposed last month.

"I don’t think it’s fair to say there will be no further price increases, but we shouldn’t expect significant above-inflation increases."

Under the previous round of price hikes, a dairy farmer’s "cost of production" was deemed to include a number of factors, including hourly compensation for the farmer’s time performing manual chores and management duties, according to CDC spokesperson Chantal Paul.

Source: Agri News