Thursday, March 25, 2010

Cheese Please!

We've been thinking a lot about food lately as we try and get our food budget back under $300/month after we cut the eating out budget. So far we're at about $370, which isn't too bad, but it's not quite where we'd like it to be. Seeing as we cut the dining out budget from $300 down to $100 the extra $70 was kind of to be expected and is still a net improvement. Having said that, we're hopefully on track to getting that number much closer to $300 this month.

While we were shopping in the United States awhile back, we noticed the dramatic difference in the price of cheese. A $5 block of cheese here would fit nicely in the palm of your hand, while I could have used the block from the US as a dumbbell. So my wife asked me, why it was so darn expensive in Canada. OK, maybe she was just pondering the thought out loud, but I figured I'd look into it anyhow.

Turns out the main component of cheese is milk! Hard to believe I know. I knew this of course, but I was surprised by the amount of milk that is needed. Some estimates say 10 lbs of milk to make 1 lb of cheese. Wow! So, with milk being such a large component, it's easy to see why it's the cost of milk that forces the price of the cheese up.

So, why is the price of milk so high here in Canada? It's because of the Quotas in Canada. I remember my uncle talking about buying and selling quotas and it just made my head spin. If they produced too much milk, that was just too bad, you could only sell based on the quotas that you purchased. This system has been in place for over 30 years and is unlikely to go away anytime soon. As bad as the system is for the economy as a whole, the average dairy farmer has over $750,000 in milk quotas.

I found most of the information here if anyone is interested.

Not that I'm suggesting a trip to the US every time you need milk and cheese. I'm sure that would throw the gas bill out of whack. Although if you are there you may want to pick some up.


  1. $300 per month for both of you?

  2. Good for you! We have a budget of $400 for all four of us. Not by choice, but we have managed to stick to it. So it is doable, you just have to be creative

  3. @Carey: Yes, that is for both of us.

    @ramblin'andie: Thank you and right back at you! Wow that's impressive. I'd love to hear how you do it. If you wanted to write a guest post about it, I'm sure others would to.

    @everyone: I had a few other comments on Facebook, so I thought I'd clarify a bit. I include baking goods, spices, etc in here, but I have a separate household item for garbage bags, dish soap etc. We haven't bought a lot of baking items lately though, so that might push the number up some.

    We don't feel constricted by this at all. It's actually a fun challenge. Avoiding the junk food and processed foods makes this easier. If we could give up the pop it would be even easier (hint: not going to happen).

  4. Ok, so I'm lost. Dairy farmers are only allowed to produce so much milk based on a quota? And if they overproduce, what happens to it? Do they toss it? That's just stupid and wasteful!!! But what does that have to do with overpriced cheese? Either I'm missing something or there isn't enough info for lil' ol' me! I guess I should check out that link!

    We had a budget of $400/month for our family, but that got thrown out the window (read: we got lazy and stopped budgeting) so now we're working on getting ourselves back on track. Man, it's hard!

  5. @FieryCanuck77: Actually I'm having a hard time finding out what happens when they over produce. Wasted? Fined? Sold at lower cost?

    The reason it effects the price of cheese is that there is a limited amount of milk to be produced in Canada. This limits competition in Canada and forces the milk prices up. Milk is of course the biggest ingredient in Cheese, so this forces the price of cheese up.

    Hope that clarifies things a bit. I'll try and find out from my Uncle what happens with the excess.

    Good luck with your budget. You can do it! If you don't do it one month, don't give up on the budget, just make the necessary adjustments. $400/month might be ambitious for a family of 6 (I wouldn't know). If you can't keep it under 400, I'm sure there are other areas to work on.

    Keep us informed!

  6. If they didn't limit the milk production with stupid quotas, we wouldn't have this problem of overpriced cheese! Does anyone else find this utter-ly ridiculous? (couldn't resist! lol) But maybe the intention to limit competition is also a way to govern the quality? (one would hope) Still seems bizarre to me!

    Yeah, our budget amount is a *bit* on the low side for our family size, but we have a limited income. I'm trying to become more resourceful, though. (read: praying for wisdom but not feeling adequate yet)

  7. If the farmer goes over the milk production they can still submit the milk, but rather than being paid for it they're penalized. So to avoid this some farmers give it to the animals or dump it.

    Competition brings lower prices and higher quality. So there is no incentive to make a higher quality product with quotas.

    I have no idea why they brought them in to begin with, but to many people benefit from it now to get rid of it.