Supply management and the dairy industry
In the dairy sector, the balance between supply and demand presupposes a balance between the production of all dairy farms and domestic consumption of dairy products. National farm production is controlled by means of quotas. Supply management also takes into account certain imports to Canada and a portion of production that is shipped to export markets.
For more information on the supply management system in the dairy sector, please see the related sections.
The Canadian Dairy Commission chairs and supports the Canadian Milk Supply Management Committee and its Secretariat. The Committee serves as the key national body for policy development and discussions related to the dairy production and processing sectors.
For dairy producers, pooling agreements are a good tool to manage the financial risks associated with the evolution of the domestic market. As a national industry facilitator, the Commission administers these agreements on behalf of the dairy sector.
The provincial marketing boards and agencies buy the milk from the producers and sell it to processors for the manufacture of dairy products. In Canada, milk is sold to processors according to a harmonized milk classification system.
The Total Quota is the national milk production target for Canada. On behalf of the industry, the Commission calculates the Total Quota on a monthly basis according to a method defined by the Canadian Milk Supply Management Committee.
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.
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