The Canadian Dairy Commission plans to hold the line on the support levels used to price industrial milk in Canada next year, despite a “small reduction” in the cost of milk production.
The commission announced Friday it would maintain the per-kilogram support prices it sets for butter and skim milk powder at $8.0062 and $4.5302 respectively as of Feb. 1.
The support prices for butter and skim milk powder are the prices at which the commission buys and sells those products through its domestic seasonality programs, to balance seasonal changes in demand in Canada’s domestic market.
Provincial marketing boards also use those prices as reference points in pricing industrial milk. The prices producers get for fluid milk are worked out in a separate process.
The support prices have gone unchanged since Sept. 1, 2016, when both were increased in what the commission said would amount to a 2.76 per cent increase in dairy farmers’ overall revenue from industrial milk sales.
That increase had followed a 2.2 per cent hike on Feb. 1, 2016; a decrease of about 1.8 per cent effective March 1, 2015, by way of a boost in the skim milk powder support price alone; and increases of 1.5 per cent in 2011 and 2012, 0.9 per cent in 2013 and one per cent in 2014.
“Despite a small reduction in the cost of producing milk in Canada, we feel that for the sake of the industry’s stability, it is best to leave the support prices of butter and skim milk powder where they currently stand,” CDC chairman Alistair Johnston said in a release Friday.
The margin received by processors for butter purchased by the CDC under the domestic seasonality program will remain unchanged.
Carrying charges, collected by the CDC to pay for the storage of normal butter stocks, also go unchanged, the commission said Friday. — AGCanada.com Network