Fact sheet – Supply Management in Canada

Our role

Created in 1971, supply management is a collective marketing Canadian agricultural policy intended to:

  • Ensure local production of high quality foods
  • Guarantee producers a stable and equitable income derived entirely from the marketplace
  • Avoid depending on government subsidies and the dumping of surpluses into third markets

It’s a social contract between producers, processors, and consumers, with one objective: transparency and quality throughout the country.

An industry committed to offering a quality product

Nothing is left to chance in milk production: implementing the best practices and the industry’s highest standards result in offering Canadians a product that is:

Of superior quality100% CanadianSocially responsible

Sustainable development

Canadian milk is able to minimize its carbon footprint thanks to:

  • Better use of agricultural waters.
  • Constantly seeking better practices with respect to reducing GHG emissions, the use of renewable energies and technological tools.

Animal welfare

Animal welfare is a must for producing high-quality milk. 

Milk producers ensure cow comfort on a daily basis and can rely on experts in the fields of nutrition and animal health.

Compliance with standards

Among the highest in the world, the standards followed by producers ensure the high quality of Canadian milk:

  • Milk composition
  • Safety of dairy products
  • Animal welfare

The proAction Program highlights producers’ achievements with respect to compliance with production standards, animal welfare standards and the best environmental practices.

Calculating the cost of milk production

The Canadian Dairy Commission plays the role of facilitator for all the links in the milk production chain.  It assesses production costs based on the reality of the producers and inflation.

Assessing the cost of production for producersCost of production includes farm costs, such as feed, veterinary care, seed, maintaining infrastructure, etc. These costs are currently rising sharply.
Using that cost in the national formulaThe national formula is used to set the price adjustment percentage (%) that will be used by the provincial boards.
Price adjustment (%) = (50% of the change in the cost of production) + (50% of the Consumer Price Index).
Consultation with the various industry groupsThe various industry groups include producers, processors, restaurateurs, retailers and consumers. Each group can make their case.
CDC approval of the producer priceThe producer price determined by the CDC is calculated for all dairy products, also called “milk classes” (milk, cheese, butter, yogurt etc.)
Milk purchase by processorsThe processors buy the raw milk at the price determined by the provincial boards for each class of milk and produce dairy products.

The various dairy products: milk classes

Class 1: All milk and beverages (milk, cream, eggnog, etc.)

Class 2: Yogurts, sports milk drinks, ice cream etc.

Class 3: All cheese products

Class 4: Butter, butteroil and dairy products (concentrated or powder) for the food industry

Class 5: Dairy products used as an ingredient in the further processing sector

Download the Supply Management information card