Slightly lower input prices and “stable” demand for dairy products have led the Canadian Dairy Commission (CDC) to leave skim milk powder and butter support prices at their current level.
As of Feb. 1, 2010 the support price for skim milk powder will still be $6.1783 per kg; the support price for butter will remain $7.1024 per kg.
“Input prices have decreased slightly from their peak levels in 2008 which now allows dairy producers to cover their cost of production,” CDC chairman Randy Williamson said in a release Friday.
“Despite the economic downturn, the demand for dairy products has remained stable in Canada,” the commission said. “Leaving support prices unchanged will contribute toward maintaining or improving this trend.”
During the 2008-09 dairy year, Canadian requirements were 50.04 million hectolitres, up 0.3 per cent from the previous year, the commission said.
Support prices are the prices at which the CDC buys and sells butter and skim milk powder to balance seasonal supply and demand changes on the domestic market.
Support prices are also used as references by provincial dairy boards to price milk sold to dairy processors for use in butter, skim milk powder, cheese, yogurt and ice cream.
The CDC’s decision means Canadian consumers “won’t be getting any relief from high dairy prices next year,” the Canadian Restaurant and Foodservices Association (CRFA) said in a separate release Friday.
Dairy production costs dropped by “nearly two per cent” this year, the CRFA said, and the CDC’s decision “does nothing to reverse a long-term trend of falling demand for dairy products,” CFRA CEO Garth Whyte said.
“Year after year the CDC forces Canadians to swallow price increases when production costs go up, but they refuse to pass along the savings when production costs go down.”
The CRFA said it had appeared before the CDC last week to call for lower prices for industrial milk. “During an economic downturn when consumers are pulling back on spending, dairy prices must be reduced to be more competitive,” the restaurateurs said in their release.
Dairy prices would need to be rolled back by 16.5 per cent to bring them back in line with the consumer price index, the CRFA said.
“Canadians need to know who is accountable for ensuring dairy prices are fair to all customers,” the CRFA said.