Canadian Dairy Commission
Symbol of the Government of Canada

Increase in support prices for skim milk powder and butter on February 1, 2012

OTTAWA, December 2, 2011 – The Canadian Dairy Commission (CDC) announced
today increases in the support prices for butter and skim milk powder that will be
effective February 1, 2012. The support price for butter will increase from $7.1922 to
$7.2810 per kg and the support price for skim milk powder will increase from $6.2721 to
$6.3673 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.
They are also used as references by provincial marketing boards to price industrial milk
used to make products such as yogurt, cheese, butter and skim milk powder.

For dairy producers, this increase in the support prices should translate into a revenue
increase of 1.5% or $1.14 per hectolitre1 for industrial milk. 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 the cost of producing milk in Canada has increased by 2.2% over
the last 12 months” said Randy Williamson, Chairman of the CDC. “In particular, the cost
of feed increased by almost 10% and the cost of fuel, by over 20%. This 1.5% increase
in support prices is about half of the current inflation rate for food” he adds.

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

The margin received by processors for the skim milk powder purchased by the Canadian
Dairy Commission will increase by 12 cents per hectolitre to take into account rising
processing 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

The Canadian Dairy Commission, a federal Crown corporation created in 1966, is a key
facilitator within the Canadian dairy sector. 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. The CDC helps design, implement, and administer policies and programs to
address dairy producer and processor needs.

1 One hectolitre is equal to 100 litres

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For more information, please contact:

Chantal Paul
Communications Services
Tel: (613) 790-7929
Email: chantal.paul@cdc-ccl.gc