Butter and skim milk support prices to increase April 1

Thursday, February 14, 2013

by SUSAN MANN

The Canadian Dairy Commission says it is increasing butter and skim milk support prices because of farmers’ rising input costs, especially for feed.

As of April 1, butter support prices rise to $7.3379 per kilogram from $7.2810 per kg while skim milk powder goes to $6.4170 per kg from $6.3673 a kg. The commission announced the price increases today.

The commission uses the support prices to buy and sell butter and skim milk powder to balance seasonal changes in demand on the domestic market. Support prices are also used as a reference by provincial marketing boards to price industrial milk used to make products, such as yogurt, cheese, butter and skim milk powder.

Even through commission chair Randy Williamson says in a press release the increase is considerably lower than the rate of inflation for food, which is currently at 2.4 per cent, the Canadian Restaurant and Foodservices Association says in its Feb. 14 press release it is disappointed dairy prices are still going up.

Association president and CEO Garth Whyte says the 0.9 per cent price increase effective April 1 is the second lowest in 15 years but it will still cost the restaurant industry $23 million.

The association has long argued for lower dairy prices and a special class of cheese pricing for the restaurant industry. Currently restaurants pay 30 per cent more than frozen pizza makers for cheese, which creates an uneven playing field.

The commission says in its release it delayed the decision on support prices so it could hold further consultations with industry stakeholders and “to take into account the many changes occurring in the industry.” Usually the commission announces changes in support prices in December and they’re effective the following Feb. 1.

The commission is a federal crown corporation created in 1966 and is a key facilitator with the Canadian dairy sector. BF