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Monday, April 21, 2008

Higher milk prices ... what higher milk prices? 

The NZ Herald reports that "the price of butter rose a staggering 82 per cent from March 2007 to March 2008, mild cheddar cheese 65 per cent and milk 25 per cent."

Since I'm visiting Canada at the moment, I decided to see what the situation is here. I very seldom buy butter so I can't comment on that from memory, but in terms of milk, I offer the following observations.

2004 (last time I lived here): 4L bottle of milk = $3.70-$4.00

2008: 4L bottle of milk = $4.15 (at Safeway, which is likely the most expensive grocery store here, but also the only one in walking distance of where I'm staying).

2L of milk is $2.65.

As far as I can work out, then, milk has increased in price by about 10% in four years! That would be about the rate of inflation, then.

As of today, CAD4.15 = NZD5.22. So if you buy 4 litres you're spending NZD1.31/L.
As of today, CAD2.65 = NZ3.33. So if you buy 2 litres you're spending NZD1.67/L.

Don't get me started on cheese, though. 1kg of NZ colby or mild for NZD12 is pretty fucking appetizing compared with the plastic orange gunk that many stores are prepared to serve up (at higher prices) over here.

And hey NZ, used cars are still cheap!


I'm not sure if you're going to appreciate this or not.

But what the hell.

MP Gordon Copeland has been making the same point about comparative price rises on dairy products domestically compared to overseas.

Does this mean you're brothers in Christ now?

Brother Copeland and I are birds of a philosophical feather.

One thing that didn't occur to me when first posting: It seems eminently possible that the dairy industry here (it says "Product of Canada" on the label, so I assume its not being trucked up from the US) receives government subsidies.

Could that affect retail pricing?
How much does it cost to buy a decent steak of seal meat in Canada?
Don't know but I could ask my Newfie mate how much a seal flipper pie sets him back.

Minus 9 and a foot of snow outside right now and all of a sudden that sealskin coat is looking tempting.
in response to you point about subsidies. Yes they could affect pricing. The explanation given for the price of our dairy products here is that they're tied to the international commodity price for milk/milk products.

If Canada's subsidising it's own industry then it's logically not tied to the same international commodity price that NZ is so, therefore, is in the position to pass on lower prices to consumers.

(and I can't believe I'm writing about the price of milk - WTF has happened to my life??)
Indeed. Contrary to the adage, it is now advised to cry about spilt milk.

The subsidization idea is no more than a tentative hypothesis on my part though.
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