Dairy group increases support prices

The Canadian Dairy Commission (CDC) has announced increases in the support prices for butter and skim milk powder. For dairy producers, these increases should translate into a revenue increase of 1.5% for industrial milk that's processed into dairy products such as butter, cheese, yogurt and skim milk powder. The support price increases will take effect on February 1, 2011.

Support prices are the prices at which CDC buys and sells butter and skim milk powder to balance seasonal demand changes on the domestic market.

In the case of fluid milk, an increase of 3% in its farm price will also come into place on the same day.

CDC chairman Randy Williamson said in a release that farm revenues are lagging behind cost increases and there was no increase in support prices in 2009.

The CDC stated in the same release that "the impact of this increase at the retail level will be influenced by many factors such as manufacturing, transportation, distribution and packaging costs throughout the supply chain."