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Industrial Milk Executive Summary

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Summary The Canadian Dairy Commission recently announced that on September 1st there would be an increase in the price of industrial milk by 2.76%. This increase was announced shorty after the raise made in February by 2.2%. Businesses like the Cake & Loaf Bakery in Hamilton are worried about how the increase will affect their loyal customers. Josie Rudderham, the owner of Cake & Loaf Bakery was not expecting this significant raise and now needs to make difficult decisions in deciding where to increase the prices of goods in her store. The industrial milk is used as a main ingredient to make cheese, yogurt, ice cream, and butter. These are all main ingredients that are essential to any restaurant or bakery. The Canadian Dairy Commission stated …show more content…
There are 22 full and part time employees at Cake & Loaf Bakery that are unable to receive an increase in pay due to the approximate 5% increase. “Ms. Rudderham says her bakery uses 120 to 140 pounds of butter and 40 to 50 pounds of cheese per week. She notes that 10 to 12 per cent of her revenue is spent on dairy products annually”. As 10-12% of Josie’s revenue is being spent on dairy products she has no choice but to raise prices of certain items being sold in her store. This can impact the amount of revenue she receives because some customers may not want to pay the new increased prices. Since there is a higher demand for milk this also impacts farmers; they must now increase production. Bill Pratt had explained that he is not willing to increase menu prices, purchase lower quality dairy products, or lay off his employees; therefore he has no choice but to see a decrease in profit. He will also need to spend more on marketing and advertising expenses to draw people into his restaurants and to his food trucks. Regular consumers also have to pay the increase for the domestic product, which leaves them with less money to spend on luxuries such as going to restaurants or purchasing goods at a

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