RCC met last week with the CDC on price setting for milk components for 2024. While the cost of production has had a slight decrease this year, CPI has gone up substantially, so there will be a slight estimated increase (from $92.95 to 93.30 per hectoliter) so as to encourage future stability. The National Pricing Formula for annual price adjustments to these products in percentages is 50% of the variation in the cost of production + 50% of the consumer price index.
As some members may know, there are exceptional circumstances that trigger when CPI is more than 5 points off the indexed cost of production whereby stakeholders (retailers, farmers, processors, restaurants, and consumer groups) can then request to temporarily suspend the results of following the normal National Pricing Formula process, e.g. holding off on a price raise. The predicted rise will be relatively small (approximately 1-2%) so we don’t anticipate that members will want to go through that process, but please let us know if you feel differently. We will also update members once the final numbers are available in mid-October.
For questions or more information contact
Senior Manager, Government Relations and Regulatory Affairs