Adjustment to the support price for butter on September 1, 2022

OTTAWA, June 21, 2022

The Canadian Dairy Commission (CDC) announced today an increase to the support price for butter that will be effective September 1, 2022. The support price for butter will increase from $9.7923 per kg to $10.0206 per kg.

The support price for butter is used by the CDC when buying and selling butter under its Domestic Seasonality Program.  Under this program, the CDC balances seasonal changes in supply and demand on the domestic market by buying butter from manufacturers and storing it when milk production is high and demand for dairy products low – usually in the spring and selling this butter back to manufacturers when the situation reverses itself, usually in the fall. These transactions occur at the support price. This support price contains three elements: the processors’ make allowance (or margin), the carrying charges and the price of milk components,

The CDC recognizes an increase in processors’ costs of 2.5% to offset the increasing costs of energy, packaging, labour and transportation. This adjustment is included in the support price for butter. Carrying charges collected by the CDC to pay for the storage of normal butter stocks, which also form part of the support price, will remain unchanged.

The rest of the increase in the support price is due to an increase in the farmgate price of milk.

The Canadian Dairy Commission, a Crown corporation created in 1966, is a key facilitator within the Canadian dairy sector. It is mandated to provide efficient milk 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 support the dairy supply chain.

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