Quote:
Originally Posted by opendoor
Well, it stands to reason that if other industrialized nations can't have lower dairy prices than Canada without government subsidies, then Canada likely can't achieve that either.
New Zealand and Australia are good examples of countries that don't have quota systems and have very limited subsidies. But they also pay more for milk than we do, so it doesn't seem like that really accomplishes anything if the goal is cheaper retail prices. 4L of 2% milk retails for about $4.75 in Canada (1.19/L). Looking at a few grocery chains, and in New Zealand it's about $1.60 CAD /L for the cheapest store-brand milk I could find and in Australia it's about $1.48 CAD /L (that's whole milk, but it's cheaper than 2% there). |
It seems to me that logically speaking if you hold everything else constant but remove the huge cost of quota prices would come down. What's the flaw in that logic?
On a more data driven basis, I'd comment that retail prices aren't a very good comparison. The dairy lobby is always using processor and retailer costs/profits as cover every time they raise farm gate prices, and those presumably differ by country. Taxes are also a significant factor - New Zealand imposes a double digit GST on milk sales and that tax is included in the price of goods sold. Which obviously has nothing to do with the cost of any specific good.
Farm gate prices are a better metric for determining how agricultural products are priced. And Canada is much higher than other countries.
Take this graph of prices by country over time.
https://www.denishaine.ca/blog/milkprice/
You'll notice that Canadian prices are much less volatile, but are consistently higher than even the peak prices in New Zealand/other countries.
That data (while covering years) is also a bit out of date, so lets go with current numbers.
The current mandated price of milk in Quebec (Alberta's site wouldn't load for me) is $80.72 per hL, minus a few deductions for a farm gate price of $77.71/hL. This is BEFORE the big price hike comes into effect in a couple of months. The current farm gate milk price in New Zealand is $64.70 NZD (~$57.33 CAD), which is after a big jump this month - probably due to the same cost increases that are affecting prices here. Once Canada's big jump kicks in the price difference will be even more significant than the current 36% more.
*QC pricing:
http://lait.org/fichiers/stats/2021/202109PF.pdf
*NZ pricing:
https://www.clal.it/en/index.php?sec...te_new_zealand
Aside from the fairness argument of consumers subsidizing millionaire business owners (aka family farmers) we're probably missing out on a significant industry. New Zealand exports significant dairy products to China - if we had large scale dairy operations in Western Canada we'd probably be cost competitive in that market as well. But small scale producers in Quebec would get competed out of the market, and their political power keeps the current system in place.