U.S. vs. Canada, Round 3: Dairy products

Canadians would benefit from the Canadian Dairy Commission taking a lightsaber to its policies.

Here’s the thing. I love dairy products. I love milk. I love cheese. I love yogurt. I love ice cream. I loved them when I lived stateside. I loved them when I moved north. What I do not love are the exorbitant price tags attached to the Canadian products.

I fear these exorbitant price tags are beginning to taint my love of all things dairy.

It’s no secret that the price of industrial milk in Canada—milk used to make cheese, yogurt, butter and ice cream—has been increasing exponentially these past 15 years and that Canadian dairy prices are among the highest in the world today.

Why you ask? Because dairy prices aren’t set by the logic of supply and demand (lots of milk = cheap; little milk = expensive); they are set by the Canadian Dairy Commission: a three-person tribunal consisting of one dairy producer, one processor and the former president of Dairy Farmers of Canada.

Since 1994, the cost of production for dairy products has fallen by 3.5 percent, while product pricing has increased. Today’s Canadian industrial milk price sits at $71.64 per 100 litres of milk. The cost to produce that same amount of milk? $59.56. Keep in mind that 59.56 number is based on an industry calculation that already includes a fair return on investment.

Talk about a mark-up.

And, it’s not as though Canadian consumers have other options from which to choose. With a vested interest in protecting its domestic market, Canada has sanctioned import tariffs of up to 300 percent to keep most foreign dairy products out of the country. This is excellent news for the Canadian dairy producer. Not such excellent news for the Canadian consumer.

Like ice cream? Me, too. But, with the rising cost of milk, manufacturers are being forced to lower its percentage in their products and re-brand them as “frozen dessert.” There’s not enough milk in their ice creams to actually label them ice cream. Like fresh pizza? While the dairy industry provides frozen pizza makers with deeply discounted cheeses to help them compete with U.S. imports, restaurateurs receive no such discount. Which means the real pie makers can’t compete with the frozen pie makers. And that many restaurateurs are beginning to cut a number of items that contain dairy products from their menus.

This is a real travesty for ice cream and pizza lovers. And for dairy lovers in general. Dairy lovers like me.

Check out the editorial by Dairy Planet for an interesting take on Canada’s dairy industry.

Winner of U.S. vs. Canada, Round 3: Team U.S.A. all the way!

Information provided by the Canadian Dairy Commission, Canadian Restaurant and Foodservices Association and Dairy Planet.

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8 thoughts on “U.S. vs. Canada, Round 3: Dairy products

  1. Lucas says:

    so I’m never moving to Canada, thanks for the heads up!

  2. Mom says:

    Sometimes what seems like a good idea, isn’t, but it takes a lot of humility to admit the mistake. Of course, if greed started the idea sounds like it’s backfiring. Unfortunately, the people are the ones to suffer.

  3. Lauren says:

    Though it seems like the logic explanations as to why the prices for dairy are higher in Canada, there are other factors at play here. Such as the quality of the product being sold. What people in the US are paying for Organic Milk should be the price point you are looking for. Seeing as all milk produced in Canada is organic milk. There are none of the added artificial hormones and growth products that are in the milk stateside. A product with higher standards is what causes the milk to come at a higher price. And that something many people are happy to pay alittle extra for.

    • Randy says:

      Oh, Lauren. “All milk produced in Canada is organic”? I am not sure where you are getting your information, but your assertions are inaccurate. Perhaps the organic industry marketing, or the various government-run marketing boards in Canada that controls the milk monopolies? In any event, milk in Canada is NOT organic, unless labeled so, and then we pay even more than the inflated prices of non-organic milk.

      The high prices of milk in Canada are due to the lack of free market through the government-run, supply-management regime. The author of this post has it spot on.

    • jilladuling says:

      Thanks, Lauren, for your comment. Not all milk in Canada is organic, as is evidenced by a stroll through our supermarkets and grocers. The “regular” stuff is more readily available, and the organic milk comes at an even higher price.

      Interestingly, The Globe and Mail did a story in March 2010 about a particular organic dairy farmer in Ontario and printed this statistic: “Organic milk is still very much a niche market: it makes up 1 per cent of the 2.4-billion litres of milk produced in Ontario each year, according to experts.”

      You can read the story here, if you like:
      http://www.theglobeandmail.com/report-on-business/your-business/business-categories/sustainability/organic-dairy-does-a-frothy-business/article1502191/

  4. Snowflake says:

    I think that Lauren meant that hormones and antibiotics are not found in any milk available for sale in Canada. Growth hormones are illegal in Canada and they are not in the USA. The standards in Canada are very high.

    Organic milk comes from dairy cows that are fed organically grown crops. Basic requirements for organic dairying include all feed being grown without synthetic pesticides or fertilizers.

    I don’t know what Americans pay for milk but I think that $4(regular milk) to $9 (organic) in Canada is hardly overpriced. Considering that consumers will spend $1-2 for a can of coke from a vending machine, $4 for 4 litres of milk is a great deal.

  5. Daniel says:

    Everything in the article is spot on except the part about it being good for dairy producers. All it protects them from is other countries buying their product. New Zealand produces the majority of the worlds milk because they have the freest dairy market. The farmers there are doing very well. The government could still make it illegal to use growth hormones and not fix the price.

    The fact that milk, at between $4.50-5.50/gallon, is more expensive than gasoline is crazy. A vending machine is not a fair comparison. The fair comparison would be 12 x 355ml cans of pop for $3-4 in the grocery store.

  6. Karin says:

    Our milk is more expensive in Canada, as are a majority of our grocery store purchases. We don’t pay for healthcare as in the USA. Take your pick.

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