Increase of the Support Prices for Skim Milk Powder and Butter on April 1, 2013
OTTAWA, February 14, 2013 – The Canadian Dairy Commission (CDC) announced today increases in the support prices for butter and skim milk powder that will be effective April 1, 2013. The support price for butter will increase from $7.2810 to $7.3379 per kg, and the support price for skim milk powder will increase from $6.3673 to $6.4170 per kg. Support prices are the prices at which the CDC buys and sells butter and skim milk powder to balance seasonal changes in demand on the domestic market. They are also used as references by provincial marketing boards to price industrial milk used to make products such as yogurt, cheese, butter and skim milk powder.
“The change in support price reflects the increase in the cost of inputs, especially the cost of feed,” says Randy Williamson, Chairman of the CDC. “However, it remains considerably lower than the rate of inflation for food which currently stands at 2.4%. Furthermore, the CDC is determined to continue to seek efficiencies in dairy production and processing in order to support market growth for milk and dairy products.” For dairy producers, this increase in support prices should translate into a revenue increase of 0.9% for industrial milk. Prices received by producers for fluid milk are determined by provincial authorities through a process independent of this announcement. The overall increase to producers may vary depending on the pricing decisions made by provincial authorities.
The carrying charges collected by the CDC to pay for the storage of normal butter stocks and the margin received by processors for butter and skim milk powder purchased by the Canadian Dairy Commission remain unchanged. This year, the CDC delayed its decision on support prices in order to further its consultations with industry stakeholders and to take into account the many changes occurring in the industry. The impact of this increase at the retail level will be influenced by many factors such as manufacturing, transportation, distribution and packaging costs throughout the supply chain.
The Canadian Dairy Commission, a federal Crown corporation created in 1966, is a key facilitator within the Canadian dairy sector. It is mandated to provide efficient dairy 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 quality dairy products. The CDC helps design, implement, and administer policies and programs to address dairy producer and processor needs.