2008 industrial milk price is a drop of good news in a bucket of challenges

    TORONTO, Dec. 10 /CNW/ - The Canadian Dairy Commission's decision to
increase industrial milk prices by 1% in 2008 is a step in the right direction
to bring the exorbitant cost of Canadian dairy products down to earth for
consumers and restaurateurs.
    The CDC announced last Friday the 2008 price of industrial milk, used to
make products such as cheese, yogurt, butter and ice cream.
    The Canadian Restaurant and Foodservices Association (CRFA) met with the
CDC in November to argue for a price freeze on industrial milk, the price of
which has skyrocketed by 54% since 1994, or nearly double the rate of
inflation. Over the same period, the cost of milk production has risen by just
1.5%, due to increased productivity.
    "With unjustifiable price hikes over the last many years, dairy products
have priced themselves off the menu. Restaurateurs want to grow the market for
Canadian dairy products, but it can't be done when these products are among
the most expensive in the world," says Ron Reaman, CRFA Vice President,
    While the 1% price increase in 2008 is a drop of good news, there are
ongoing challenges and questions for restaurateurs and consumers when it comes
to Canada's dairy industry:

    -   The price of industrial milk is the traditional benchmark from which
        provincial milk marketing boards set the price for fluid milk and
        cream. But last year some provincial boards came up with a new
        equation that led to much higher prices for consumers. Will the same
        thing happen again this year?
    -   Dairy producers are pushing for changes to the compositional
        standards for cheese that would significantly alter cheese production
        in Canada. The result will be higher prices and less selection for
        consumers, including fewer low-fat dairy products available on the
    -   Pizzerias continue to compete on an uneven playing field with frozen
        pizza manufacturers when it comes to the price of their main
        ingredient, mozzarella cheese. Fresh pizza makers are forced to pay
        prices up to 30% higher than the special price offered to their
        competitors, frozen pizza makers.

    "The CDC has made a responsible pricing decision for 2008, but we have a
long way to go before we can turn the tide of declining dairy consumption in
Canada," says Reaman.

For further information:

For further information: Ron Reaman, CRFA Vice President, Federal, (416)
649-4242; Jill Holroyd, CRFA Vice President, Research and Communications,
(416) 649-4217

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