Most of our readers know that we're always searching for a deal and that we hate paying full price for anything. So when we bought our first jug of milk after arriving here in Nova Scotia, we had a bit of a shock.
First of all, the most popular and usually the cheapest way to buy milk here is in a 4 litre container. For our American friends, 4 litres is only slightly more than a gallon. There are 3.78 litres in a gallon, so to benefit the purposes of our price discussion, we have to keep in mind that the 4 litre container is around 6% larger than a gallon.
At the major grocery chains here, 4 litres of milk (1%, 2%, or homo) is $7.69. There seems to be very little, if any, change between pricing at the major grocery stores. Some of the discount stores like Giant Tiger have it as cheap as $6.69, which is what we paid today when we were out. Shoppers Drug Mart also has the occasion "deal", sometimes as low as $5.99.
So why are the milk prices so high here?
Well I've done a few hours of research and still don't have an easy answer to that question. I can however offer some findings regarding the recent history of milk pricing, and maybe offer my opinion for the purposes of discussion.
In 1997, the provincial government instituted regulated pricing for the dairy industry here. I can't seem to find out why the regulated pricing was instituted though. It's all very confusing because there are so many different marketing boards and dairy associations and federal regulations and quotas involved. The most recent pricing, in place since 2005, says that 4 litres of milk cannot be sold at the retail level for less than $5.19.
I also found a Statistics Canada reference that says that dairy farmers receive approximately the same amount of money in Nova Scotia as they do in other provinces, and that is about $0.69 per litre, or $2.76 for 4 litres. So the extra money from the retail sale does not appear to be making it's way back to the farmers pocket.
I also found an article that says the larger stores in Nova Scotia do not set the price of the milk they sell, that all they do is lease space to the dairys and the dairy then sets the price. But I can't find anything else to confirm this. The fact that the major grocery stores are all at $7.69 says to me that there may be something causing the lack of competition at this level.
All of the dairy processors are unionized in Nova Scotia. When you have government regulation, and also union involvement, costs are sure to be at their highest. The latest contract from Farmers Dairy here says that unskilled workers are making over $20 an hour. The problem is that it's possible other provinces are the same way, so I can't be sure that this is what has caused the retail price to be so much higher here than anywhere else.
Or perhaps we're making a big deal out of nothing and that the prices aren't that far off. But I know for a fact that we paid as low as $0.99 a gallon in Texas last fall. How much do you pay for a gallon, or 4 litres, of milk?