Second farm gate price increase of 2022 set to add to restaurant costs

Dairy products, under supply management in Canada, are subject to a price adjustment yearly.

The last pricing decision was made by the Canadian Dairy Commission (CDC) in fall 2021 for application on February 1, 2022.

On May 27, 2022, the CDC Board received a request from Dairy Farmers of Canada to trigger exceptional circumstances under criterion number 1: An unanticipated event that affects the cost of production of milk (COP), but that is not captured in the most recent COP data.

As a result, the CDC held pricing consultations on June 14-15, regarding a midyear price change, for a price announcement on June 21, for application on September 1, 2022.

As one of the five key stakeholders (producers, processors, food service, retailers, and consumers) invited to the consultations, Restaurants Canada presented the foodservice industry’s point of view on the impact an additional price increase would have. Restaurants Canada requested a dismissal of any price increase demand to not only avoid a precedent, but to reflect the reality that restaurants are at a point where they can no longer absorb or pass along any kind of additional charges.

Despite the arguments of Restaurants Canada, and the ones of retailers who were also aligned, the Canadian Dairy Commission has rendered its decision and dairy prices will increase by 2.5% as of September 2022.

Find the full news release on the CDC’s decision here.

Restaurants Canada will continue to advocate for quality dairy products at an affordable price for the foodservice industry and consumers, and will continue to push arguments forward in regard to potential adjustments on both sides of the spectrum, should production costs decline after the current inflation and potential upcoming recession.