Canadian Dairy Commission
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Increase in support prices for skim milk powder and butter on February 1, 2009

OTTAWA, December 3, 2008 – The Canadian Dairy Commission (CDC) announced today increases in the support prices for butter and skim milk powder that will be effective February 1, 2009. The support price for skim milk powder will increase from $6.1125 to $6.1783 per kg. The support price for butter will increase from $7.0462 to $7.1024 per kg. Support prices are the prices at which the CDC buys and sells butter and skim milk powder to balance seasonal demand changes on the domestic market.

For dairy producers, this increase in the support prices should translate into a revenue increase of 1% or $0.74 per hectolitre for industrial milk used to make products such as yogurt, cheese, butter and skim milk powder. Prices received by producers for fluid milk and cream 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.

“Our data show that Canadian dairy producers' revenues are lagging behind the increases that we saw in the cost of feed, fuel and fertilizers for most of 2008” said Randy Williamson, Chairman of the CDC.

The new support price of butter will also include a reduction of 2 cents per hectolitre in the carrying charges collected by the CDC to pay for the storage of the normal butter stocks.

The margin received by processors for the skim milk powder and butter purchased by the Canadian Dairy Commission, and included in the support prices, will increase by 11.3 cents per hectolitre (1%) to take into account rising costs.

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. The CDC helps design, implement, and administer policies and programs to address dairy producer and processor needs. 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.

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For more information, please contact:

Chantal Paul
Communications Services
Tel: (613) 792-2049
Email: paulc@agr.gc.ca

Web site: www.cdc-ccl.gc.ca