Dairy supports to rise one per cent Feb. 1

Canada’s dairy producers’ overall revenue from sales of industrial milk is scheduled for a one per cent increase on Feb. 1 next year.

The Canadian Dairy Commission on Tuesday announced increases in the support prices it sets for skim milk powder and butter, to take effect starting in February 2014.

Specifically, the support price for butter will increase to $7.4046 from $7.3379 per kilogram; the support price for skim milk powder will increase to $6.4754/kg, from $6.417.

The CDC’s chairman, former Saputo Canada president Randy Williamson, said the one per cent hike “is in line with the consumer price index, which stands at 0.9 per cent.”

Meanwhile, he noted, “over the last year, the cost of producing milk has increased by 1.75 per cent.”

The commission’s supports are the prices at which the CDC buys and sells butter and skim milk powder in order to balance “seasonal changes” in domestic demand.

Provincial marketing boards also use the CDC’s support prices as their reference points to price industrial milk — the milk used to make products such as yogurt, cheese, butter, ice cream and skim milk powder. The overall increase dairy farmers receive “may vary depending on the pricing decisions made by provincial authorities,” the CDC said.

The carrying charges the CDC collects to pay for storage of normal butter stocks will remain unchanged in 2014, the commission said, as will the margin processors receive for butter and skim milk powder the CDC buys.

The expected increase in industrial milk prices follows increases of one per cent in 2009, zero in 2010, 1.5 per cent in 2011 and 2012 and 0.9 per cent in 2013.

The Canadian Restaurant and Foodservices Association, a longtime critic of Canada’s dairy pricing frameworks, said Tuesday the CDC’s announcement amounts to “a $26 million hit to Canada’s restaurant industry and exceeds the CDC’s own price projections.”

“We have told the CDC that they are pricing dairy off the menu,” CRFA CEO Garth Whyte said in a release. — AGCanada.com Network

Related story:
Dairy supports up slightly April 1, Feb. 15, 2013

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