OTTAWA, July 15, 2016 – The Canadian Dairy Commission (CDC) announced today an increase in the support prices of butter and skim milk powder that will be effective September 1, 2016. The support price of butter will increase from $7.7815 to $8.0062. The support price of skim milk powder will increase from $4.4176 to $4.5302/kg.
“These adjustments in support prices are meant to offset the significant reduction in producer revenues in the last year. This revenue reduction has been partially compensated by a declining cost of production, which allowed us to limit the price adjustment” says Alistair Johnston, Chairman of the CDC. This lower revenue was partly due to a decrease in world prices and partly due to larger sales of surplus milk protein in low-priced markets.
The CDC expects these adjustments in support prices to add up to an overall revenue increase of approximately 2.76% for dairy producers for milk processed into yogurt, ice cream, cheese, and butter. Prices received by producers for fluid milk are determined through a process that is separate from this announcement. Overall increases to producers will depend on the pricing decisions made by provincial authorities.
The impact of these adjustments at the retail level will be influenced by many factors such as manufacturing, transportation, distribution and packaging costs throughout the supply chain.
The margin received by processors for butter and skim milk powder purchased by the CDC under the Domestic Seasonality Programs will remain unchanged. Carrying charges collected by the CDC to pay for the storage of normal butter stocks will also remain unchanged.
Support prices are used by the CDC when buying and selling butter and skim milk powder under its Domestic Seasonality Programs. These programs balance seasonal changes in demand on the domestic market.
The Canadian Dairy Commission, a Crown corporation created in 1966, is a key facilitator within the Canadian dairy sector. It is mandated to provide efficient milk producers with the opportunity to get a fair return on their labour and investment, and to ensure that Canadian consumers are provided with adequate supplies of dairy products. The CDC helps design, implement, and administer policies and programs to address stakeholders’ needs.
For more information, please contact:
Chantal Paul, Chief Communications and Strategic planning
Tel.: 613-790-0929
Email: chantal.paul@cdc-ccl.gc.ca