Single fluid milk price threatens provincial commission

“The commission is concerned with the protection of consumer interests.”

– CRAIG LEE, MMPRC CHAIRMAN

A Manitoba agency formed during the 1930s to control the price of milk could vanish if plans for a uniform fluid milk price across the Prairies come to pass.

The Manitoba government has agreed in principle to harmonizing producer milk prices with Saskatchewan, Alberta and British Columbia. This will put the finishing touches on the creation of a single market for milk in Western Canada.

But it could mean the end for the Manitoba Milk Prices Review Commission, which sets a producer price for fluid milk and controls wholesale and retail milk prices.

The commission is established under The Milk Prices Review Act, passed in 1980. Its ancestor, The Milk Control Board, was formed during the 1930s to ensure Depression-era families could afford milk for their children.

David Wiens, Dairy Farmers of Manitoba chairman, told the group’s annual meeting that MAFRI Minister Rosann Wowchuk agreed verbally in September to develop a formula that would give Manitoba milk producers the same fluid milk price as in other western provinces.

Alberta currently sets a benchmark price and Saskatchewan and B. C. follow it. Manitoba is the odd man out.

To join in, Manitoba would have to revise The Milk Prices Review Act, which gives sole pricing jurisdiction to the seven-person Manitoba Milk Prices Review Commission.

Wiens suggested the commission could continue to regulate retail prices while the Western milk pool controlled producer prices.

But MMPRC chairman Craig Lee said the reason the act exists is to regulate prices from the farm to the store and if that changes, the commission’s future is doubtful.

The commission periodically sets a producer price for fluid milk based on dairy farmers’ production costs. Prices further up the chain are regulated as a result.

“If you give up authority on the cost side, how do you maintain regulation on the price side?” Lee said in an interview during the DFM meeting. “The commission is concerned with the protection of consumer interests.”

Lee noted milk price controls were implemented at a time when nearly a third of Canadians lived on farms and could get milk any time they wanted. The real purpose was to make milk available to urban residents at reasonable prices.

Today, nearly 98 per cent of Canadians live in towns and cities, making the need to guard consumers’ interests even greater, he said.

The MMPRC will have something to say if the province tries to change its mandate or eliminate it altogether, Lee warned.

He suggested the province could include “meaningful safeguards” for consumers in the Manitoba Farm Products Marketing Act. But that would involve opening up a second statute and complicating the process.

The commission currently regulates only the price for a one-litre carton of milk. Singlelitre cartons make up just six per cent of retail fluid milk sales, so there’s not a lot left to regulate anyway, said Wiens.

But Lee said setting a maximum price for one-litre cartons effectively controls two-and four-litre containers because retailers will not price those sizes above the single-litre ceiling.

Wiens told DFM members his board hopes Manitoba will join the single-price pool by February 2009. Lee doubted it could happen that soon.

The current fluid milk price to Manitoba producers is $84.55 a hectolitre, plus another $1.37/hl for food safety compliance costs. The Alberta price is $85.37/hl, plus $1.52/hl for compliance costs.

Wiens said it only makes sense to have one price throughout the West because producers already share markets and pool revenues.

The western milk pool has worked toward a single price for three years but Manitoba has always been a sticking point, he said.

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