CDC to raise farm-gate milk prices on Feb. 1, 2021

The Canadian Dairy Commission announced it intends to make several changes on Feb. 1, 2021, including a two per cent increase in the price for milk used in the manufacture of dairy products intended for the retail sector and the restaurant industry.

The changes are a result of the CDC’s review of Canadian farm-gate milk prices and other costs used in administering the supply management system.

This year, because of various factors such as the COVID-19 pandemic, the usual pricing formula was not applied, the CDC said in a news release. Instead, the CDC held consultations and rendered a decision on the price adjustment of milk. As a result, the farm-gate milk price will increase by $1.46/hectolitres. The rise in producers’ revenues will partially offset losses incurred due to the COVID-19 pandemic and market trends which have caused revenues to remain below the cost of production. This will increase by two per cent the price for milk used in the manufacture of dairy products intended for the retail sector and the restaurant industry.

The new farm milk prices are subject to approval by provincial authorities in early December 2020.

The CDC’s butter storage fees will remain unchanged. The Commission stores a certain quantity of butter in order to guarantee an adequate supply throughout the year, and to prevent shortages.

However, the CDC also recognizes a two per cent increase in butter processing costs. This applies to butter sold by manufacturers to the CDC in the context of its storage programs.

In order to reflect these changes, the support price for butter used by the CDC in its storage programs will increase from $8.5524 to $8.7149 per kg on Feb. 1, 2021.

Read the full announcement from the Canadian Dairy Commission.