What is Special Class Pricing?
On or before the 15th day of each month, the CDC announces the Special Milk Class Permit Program (SMCPP) milk component prices for butterfat, protein, and other solids for the next month. These component prices appear on the Component pricing page of this Web site.
Canadian dairy processors use these Special Milk Class Component Prices each month to purchase the raw milk components used to manufacture the dairy ingredients that are sold to Special Milk Class Permit Holders.
A number of factors are taken into account by dairy processors and distributors in setting the ultimate selling price of dairy ingredients to a Special Class Permit Holder. They include but are not limited to the following:
- Processing of the raw milk into dairy ingredients (includes labour, energy and other related costs)
- Quantity of dairy ingredients purchased/ordered by a SMCPP permit holder (full truck load vs. less-than truck load)
- Product mix variety
- Delivery requirements (delivery to multiple plants)
- Product specifications (6-months aged, shredded, Organic certified, etc.)
- Any special requirements
- Financing terms
Ultimately, it is the responsibility of the Special Class Permit Holder to consider a competitive bid process, select a dairy processor and/or Distributor and negotiate the purchase price of its Special Class priced dairy ingredients.
For information on U.S. Pricing and how the CDC calculates the Special Milk Class prices, visit the U.S. Pricing section.
For more information on Special Milk Class Pricing, visit the September 2010 issue of the Experts Forum.