Monday, October 15, 2018
 Canadian Dairy Support Price of Skim Milk Powder Drops  

The Canadian Dairy Commission (CDC) has announced that it will reduce support for skim milk powder (SMP) effective March 1, 2015.


The move is unprecedented, where previously prices had continuously increased. The current support price, which the CDC buys skim milk powder and butter at is CAD6.3109 per kg, or US$5074/t. This is down 16 cents per kg from the 2014 price. The drop in price reflects the lower cost of production through lower fuel, transport and feed costs.


The fixed prices set by the CDC allow processors to fix the farmgate milk price paid to producers. It can be used to regulate the volume of milk produced, which allows Canada to essentially be self-sufficient in dairy production. However, the high prices paid by the CDC mean that retail prices for dairy products are relatively high and could contribute to Canada's slow growth in consumption rates, which are also affected by a slow population growth rate, changing tastes and dairy substitutes. 


The dairy support prices have generally outperformed the global market for dairy products in the past 10 years. 

Source: USDA

 


Posted on Thursday, January 29, 2015 (Archive on Thursday, February 05, 2015)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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