Milk prices in New Brunswick are set to increase by four cents per litre starting Wednesday (Feb. 1).
A news release from the New Brunswick Farm Products Commission blames the increase on rising production costs faced by dairy producers and processors.
It says dairy farmers are paying more for feed, machinery and equipment repairs, fuel and oil, custom work and hired labour.
The commission says the price adjustment also covers increased costs borne by dairy processors, including for packaging, manufacturing, transportation and distribution.
The commission says farmers will receive 1.7 cents more per litre from the price increase, while processors will get 2.4 cents more per litre.
It says pricing for the school milk program will remain unchanged for the current academic year.
In October 2022, The Canadian Dairy Commission approved the increase in farm gate milk prices of about 2.2%, or just under two cents per litre, effective Feb. 1, 2023. The increase becomes official once approved by provincial authorities.The Crown corporation, which oversees Canada's dairy supply management system, said at the time the increase is based on the rising cost of production.
The latest increase comes after the commission approved two price hikes in 2022: A 2.5% increase, or roughly two cents per litre, in September and an 8.4% increase, or six cents per litre, in February.
Altogether, the total 12-month farm gate milk price increases amount to roughly 10 cents per litre, or 13.1%.
The price hike will see all dairy products - including butter, cheese, ice cream and yogurt - increase in price though some products will be affected more than others.
"It applies to all products but not all products will be impacted the same way because they use a different mix of fat and protein in the final recipe,'' said Matthew Gaudreau, the dairy commission's director of policy and economics.
"The 2.2% applies to milk going into all dairy products, but it won't impact all dairy products in the same way.''
The farm gate milk price is just one factor that goes into the retail price of milk, he added.
Other factors along the supply chain could affect the final product price of dairy products, Gaudreau said.
His comments came during a virtual news conference to discuss the approved price increase - the first time the commission has presented its decisions in such a format.
Jennifer Hayes, chairperson of the Canadian Dairy Commission, said the decision to hold a news briefing comes in response to public requests for more transparency.
"Canadians in general and the media have been asking for more openness on the part of the dairy commission - who we are, what we do, our processes, what our role is in the supply management system - so this is really in response to that,'' she said.
"We hope that we're rising to meet that particular need and challenge.''