BSE drives call for milk price increase
this document web posted: Wednesday, December 1, 2004 20041202p82
By Barry Wilson
Ottawa bureau
To illustrate the impact that BSE has had on his bottom line, Vancouver Island dairy farmer Wally Smith produces a receipt for the Nov. 3 sale of a month-old bull calf.
The net return after freight was $0. Before May 20, 2003, the calf could have brought in $250.
"The BSE crisis has been a major hit for our industry, 30-50 percent off the bottom line of dairy farms," Smith said during a tour of Eastern Canada with Saskatchewan dairy farmer Juliann Blaser Lindenbach to publicize the continuing damage of the closed U.S. border.
"And while there might be some signs of progress for other cattle sectors, there is no end in sight for dairy farmers."
A border opening for live cattle would not affect older cull cows or breeding stock, which have been the main impact for dairy.
Part of the dairy message to reporters during the media tour was that the Canadian Dairy Commission will have to take account of the industry problems when it announces a new support price in mid-December.
Federal agriculture minister Andy Mitchell already has said the pricing announcement will be part of the government's reaction to the dairy impact of BSE, and dairy commission chair John Core has promised a significant increase.
Smith said BSE alone should prompt a two-cents-per-litre milk support price increase, a three percent boost in the 64.77-cent base price. The total increase must be much larger to cover shrinking margins and rising costs of fuel and steel products, he said.
"We've seen big increases on the cost side and a softening of income."
Arguments like that make Stephanie Jones seethe. It guarantees a resumption of the annual battle between dairy farmers and dairy product users when the price decision is announced.
Her organization, the Canadian Restaurant and Foodservices Association, has recommended that the support price remain frozen this year, despite what she says has been a 2.5 percent decline in the dairy cost of production during the past year.
However, Jones expects a large increase and she said the food industry cannot afford to absorb it. She said the dairy farmer lobby has asked for an increase of more than 10 percent.
Increases in recent years have ranged from 1.49 percent in 1999 to 3.9 percent in 2002.
From 1999 to 2003, the support price increased more than 15 percent or 8.5 cents per L. Part of the increase was to compensate farmers for the loss of a direct government subsidy in the late 1990s.
Before the House of Commons finance committee last week, the food service industry urged MPs to tell Mitchell he should "reject any price increase without clear justification for Canadian consumers."
Jones acknowledges that won't happen.
"The minister already has, improperly I believe, signalled that pricing should be part of the BSE solution," she said. "We have no objection to farmers being helped because of BSE, but raising a permanent price and passing it all onto consumers is not the way to do it."
She said years of lobbying have not convinced a series of ministers to look at the dairy pricing issue seriously.
She said consumers already pay a $2 billion annual tax because of what she called inflated dairy prices.
Dairy Farmers of Canada rejects that allegation, insisting that a June 2004 study by the A.C. Nielsen company found Canadian dairy products on average 23.6 percent cheaper than comparable products in the United States.
this document web posted: Wednesday, December 1, 2004 20041202p82
By Barry Wilson
Ottawa bureau
To illustrate the impact that BSE has had on his bottom line, Vancouver Island dairy farmer Wally Smith produces a receipt for the Nov. 3 sale of a month-old bull calf.
The net return after freight was $0. Before May 20, 2003, the calf could have brought in $250.
"The BSE crisis has been a major hit for our industry, 30-50 percent off the bottom line of dairy farms," Smith said during a tour of Eastern Canada with Saskatchewan dairy farmer Juliann Blaser Lindenbach to publicize the continuing damage of the closed U.S. border.
"And while there might be some signs of progress for other cattle sectors, there is no end in sight for dairy farmers."
A border opening for live cattle would not affect older cull cows or breeding stock, which have been the main impact for dairy.
Part of the dairy message to reporters during the media tour was that the Canadian Dairy Commission will have to take account of the industry problems when it announces a new support price in mid-December.
Federal agriculture minister Andy Mitchell already has said the pricing announcement will be part of the government's reaction to the dairy impact of BSE, and dairy commission chair John Core has promised a significant increase.
Smith said BSE alone should prompt a two-cents-per-litre milk support price increase, a three percent boost in the 64.77-cent base price. The total increase must be much larger to cover shrinking margins and rising costs of fuel and steel products, he said.
"We've seen big increases on the cost side and a softening of income."
Arguments like that make Stephanie Jones seethe. It guarantees a resumption of the annual battle between dairy farmers and dairy product users when the price decision is announced.
Her organization, the Canadian Restaurant and Foodservices Association, has recommended that the support price remain frozen this year, despite what she says has been a 2.5 percent decline in the dairy cost of production during the past year.
However, Jones expects a large increase and she said the food industry cannot afford to absorb it. She said the dairy farmer lobby has asked for an increase of more than 10 percent.
Increases in recent years have ranged from 1.49 percent in 1999 to 3.9 percent in 2002.
From 1999 to 2003, the support price increased more than 15 percent or 8.5 cents per L. Part of the increase was to compensate farmers for the loss of a direct government subsidy in the late 1990s.
Before the House of Commons finance committee last week, the food service industry urged MPs to tell Mitchell he should "reject any price increase without clear justification for Canadian consumers."
Jones acknowledges that won't happen.
"The minister already has, improperly I believe, signalled that pricing should be part of the BSE solution," she said. "We have no objection to farmers being helped because of BSE, but raising a permanent price and passing it all onto consumers is not the way to do it."
She said years of lobbying have not convinced a series of ministers to look at the dairy pricing issue seriously.
She said consumers already pay a $2 billion annual tax because of what she called inflated dairy prices.
Dairy Farmers of Canada rejects that allegation, insisting that a June 2004 study by the A.C. Nielsen company found Canadian dairy products on average 23.6 percent cheaper than comparable products in the United States.
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