Why milk costs more in B.C. than in the U.S.
Published Friday, February 22, 2013 6:00AM PST
**Story first aired in September 2012
The B.C. dairy industry is losing millions of dollars in business because of consumers heading south of the border to buy their dairy products, says an industry spokesman who is urging Canadians to buy closer to home.
Dave Eto, executive director of the B.C. Dairy Association, said between three to seven per cent of the annual provincial revenue is being taken away because of British Columbians taking advantage of cheaper U.S. dairy prices, which can be 50 per cent lower.
Eto says the reason B.C. milk has a higher price tag is because its American counterparts are heavily subsidized.
"In the United States, over 50 per cent of the input costs that go into producing a gallon of milk are covered by people's taxes. In Canada that's not the case," he told CTV’s Steele on Your Side.
But while U.S. farmers receive heavy government subsidies, Canadian farmers are part of a supply management system, which puts a quota on how much farmers produce and limits the amount of foreign milk imported into the country.
With higher prices and a close proximity to the border, many B.C. residents can’t afford not to shop in the U.S., says Bruce Cran, President of the Consumers Association of Canada.
"Why would you pay $6 a gallon here when you can pay $3 a gallon for milk across the line?” he said.
"I wish we could buy it at home, but I think this has reached the stage where something has got to be done about this, otherwise Canadians will be buying most of their daily purchases across the line if they can.”
Fifty-seven-per-cent of 800 British Columbians polled online by Angus Reid Public Opinion said Canadian milk is overpriced and it makes financial sense to shop in the U.S.
Almost half – 49 per cent – said that they’d consider buying milk in the U.S. if they lived close to the border. That number jumps to 56 per cent when looking at people living in Metro Vancouver.
Surrey Farmer John Tamis, who has 60 milking cows on his farm, defends the marketing monopoly.
"As farmers, we have no control on what we're paid for the milk,” he said.
Tamis, who operates Lindrian Farms, argues that B.C. milk is healthier and herds are smaller. By law, dairy products in Canada cannot contain hormones or antibiotics. That's not the case in the United States.
"In B.C. there’s one standard. It's either top of the line or its not. And I think you're basically getting what you pay for,” Tamis said.
The industry hopes consumers make the choice to support local farmers by spending their dairy dollars where they live, arguing the revenue goes not only to the local producers but to fund health care and education.
Of those surveyed in the Angus Reid Public Opinion poll, 30 per cent of respondents said buying milk in the U.S. is “unacceptable and unpatriotic,” and takes business away from Canadians.
Eto says there’s a border bias towards Canadian dairy.
"You cannot bring dairy products into the united states. It's a one way trip. So I find it very interesting we will accept U.S. dairy products but the U.S. won't accept Canadian dairy products,” he said.
The dairy marketing monopoly is major point of contention in Canadian trade negotiations.
Prime Minister Stephen Harper wants Canada to be part of the Trans-Pacific Partnership, a group that is trying to create the world's biggest free-trade bloc between the Americas and Asia. But other nations in the partnership say Canada’s dairy quota system creates an unfair advantage for Canadian producers.
The Canadian Restaurant and Foodservices Association has launched a petition at FreeYourMilk.ca lobbying the Harper government to lower Canadian dairy prices.
The group says government policy is making milk, cheese and other dairy products less affordable to families, especially those with lower incomes.
Have your say: Do you buy dairy in the U.S.?