Milk prices jump 3 cents on Feb. 1

The New Brunswick Farm Productions Commission is hiking milk prices by three cents per litre on Feb. 1, blaming the latest increase onhigher processing and production costs.

Bob Shannon, the commissions chairman, announced the price increase in a statement on Friday.

"The New Brunswick Farm Products Commission has determined that a price adjustment was warranted based on several factors, with the most significant factor being the steadily increasing costs of the production, processing and delivery of milk to consumers," Shannons statement said.

"By increasing the price of milk by three cents per litre, the commission has managed to balance the interests of New Brunswick dairy producers, processors and consumers."

When the increase is implemented in February, producers will receive a boost of less than one cent, processors will receive about 1.5 cents and the remainder will go to retailers.

The farm products commission sets prices for fluid milk products in the province.

The milk price increase was foreshadowed last September. Grain prices climbed 50 per cent over the summer following widespread drought in Canada and the United States.

New Brunswick dairy farmers were concerned about their increasing costs. Milk producers and dairy farmers started price negotiations in November.

While milk prices are going up at stores, the prices for the School Milk Program will remain unchanged for the current school year. The program, in existence since 1995, offers savings by having processors and producers subsidize the price of milk in schools.

The commission said the subsidy has been worth roughly $1.3 million in recent years.