The Canadian Dairy Commission (CDC) annually reviews and establishes support prices for butter and skim milk powder. Support prices are the prices at which the CDC purchases and sells butter and skim milk powder within the framework of its various programs. The CDC ceased purchasing skim milk powder in 2017.
Each year, the CDC, in collaboration with the provinces, undertakes a national study of the cost of producing milk at the farm (COP study). In the fall, the CDC also holds consultations on milk prices with dairy producers, processors, further processors, restaurateurs and consumers. The CDC Commissioners then make a decision on the support prices which is usually announced by mid-December and becomes effective on February 1st of the following year.
The CDC Commissioners base support prices on the following elements: results of the cost of production study, arguments presented by various stakeholders, an evaluation of the processors' margin, economic indicators such as the consumer price index as well as their own experience and knowledge of the industry.
As of February 1, 2023, the processor margin for the butter support price is set at $0.9106/kg of butter.