Slightly lower input prices and “stable” demand for dairy products have led the Canadian Dairy Commission (CDC) to leave skim milk powder and butter support prices at current levels.
As of Feb. 1, 2010 the support price for skim milk powder will still be $6.1783 per kg; the support price for butter will remain $7.1024 per kg.
“Input prices have decreased slightly from their peak levels in 2008 which now allows dairy producers to cover their cost of production,” CDC chairman Randy Williamson said in a release Friday.
Demand for dairy products has remained stable in Canada, the commission said, and “leaving support prices unchanged will contribute toward maintaining or improving this trend.”
During 2008-09 Canadian requirements were 50.04 million hectolitres, up 0.3 per cent from the previous year, the commission said.
Support prices are the prices at which the CDC buys and sells butter and skim milk powder to balance seasonal supply and demand changes. Provincial dairy boards use them as references to price milk sold to processors for use in butter, cheese, yogurt and ice cream.
The decision means consumers “won’t be getting any relief from high dairy prices,” the Canadian Restaurant and Foodser vices As sociat ion (CRFA) said in a separate release Friday.
Dairy production costs dropped by “nearly two per cent” this year, the CRFA said. “Year after year the CDC forces Canadians to swallow price increases when production costs go up, but they refuse to pass along the savings when production costs go down,” CFRA CEO Garth Whyte said.
Dairy prices would need to be rolled back by 16.5 per cent to bring them back in line with the consumer price index, the CRFA said.