It’s a fact: the milk is getting more expensive. Why, and who benefits most? To find out, see what’s behind the price of a glass of milk (250 ml)
June 19, columnist Dubuc of La Presse tried to demonstrate the “problem” of Quebec milk prices by comparing it with the price of milk in the United States.
A fixed price in Quebec
First recall that the price of milk in Quebec is set by the board of agricultural and food markets in Quebec.
This award is established so it would cover the production costs of 50% of the most productive dairy producers in the province. In two words, it should reflect what it costs in Quebec to produce milk.
Currently, the supermarket, the liter of milk (4-l) is sold at a minimum price of $ 1.58 (maximum of $ 1.73).
This means that a Quebec 250ml glass of milk costs between $ 0.40 and $ 0.43.
In the US, a gallon of milk*** (3.8 L) is selling $ 1 * (on average, Canadian dollars).
The American milk glass costs $ 0.25.
In short, Quebecers pay their milk between 15 and 18 cents more than the other side of the border.
From the producer
Now push the calculation one step further: how the milk producer receives glasses of milk?
In Quebec, the gross price received by the producer (in 2011) is about $ 0.20 per glass of milk. To this, we must subtract about a penny for marketing costs (transportation costs, contribution to the Union of Agricultural Producers, advertising expenses, etc.).
In the US, the producer receives $ 0.13 for the same glass of milk. It is less. However, it enjoys government support. If it is difficult to establish precisely how many US producers receive public money (these data are not disclosed), a 2011 study ** estimated that for every liter of milk, the US producer receives $ 0.31 the state. This equates to $ 0.08 per 250 ml glass.
The amount of state support is an estimate. Except that in considering the margin of error, we can establish safe to say that they operate here and in our southern neighbors, dairy farmers receive about the same amount for their white gold.
The share of retailer
So why is it so expensive milk in Quebec? It’s not clear.
Clearly, retailers and processors grant higher margins in Quebec.
“According to a Senate committee, milk is more expensive in Canada because of the greater concentration of retail,” says François Dumontier, spokesperson of Milk Producers Federation of Quebec.
“In the US, producers are victims of large fluctuations in the milk price continue Mr. Dumontier. The milk crisis is real there. Moreover, they lead slowly towards a form of supply management, as in Quebec. ”
* Because they were more complete and for comparison purposes, we used 2011 data to perform our calculations.
** According to a study by the Nielsen Company commissioned by the International Federation of milk.
*** How much does a gallon of milk weigh: The weight of a U.S. gallon of milk will vary slightly depending on the liquid’s density, but it will normally be around 8.6 pounds.