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Consumers will pay 3.5 cents per litre more for milk beginning Sept. 1, the New Brunswick Farm Products Commission announced this week.

"The price adjustment is wholly based on the effects of the rise of fuel costs throughout the supply chain," said Hazen Myers, commission chairman. "Rising fuel costs not only affect distribution costs, but also operating and feed costs for the producer as well as packaging costs for the processor."

Dairy producers and fluid milk processors will each receive an increase of 1.45 cents per litre. Dairy producers have suffered significant increases in their fuel, fertilizer and feed costs, while processors have had to deal with sharp increases in their distribution and packaging costs. With the standard markup at retail factored in, consumers can expect to pay an additional 3.5 cents per litre in stores.

"The commission feels that by implementing these adjustments, it has succeeded in upholding its mandate of balancing the interests of producers and processors while maintaining competitive prices for New Brunswick consumers," Myers said.

School milk prices will remain unchanged for the upcoming school year. Under this program, processors and producers in recent years have been subsidizing the price of milk for school children in New Brunswick by about $1.3 million per year. This program provides a significant saving to school children in the province.

"I want to commend the dairy industry for its long-standing support of this important program," Myers said.

The New Brunswick Farm Products Commission represents producers, processors and consumers and is responsible for setting the wholesale price of fluid milk products in New Brunswick.