Wednesday, December 9, 2020

Bigger price boost coming for rich milk

Milk that has a relatively high content of butterfat and SNF (solids, not fat) and protein will get a greater-than-average price increase effective Feb. 1.

It flows from the upcoming price adjustments announced by the Canadian Dairy Commission for industrial milk pricing.

In general terms, it means herds of Jersey, Guernsey, Ayrshire and Brown Swiss cows will enjoy a price increase.

To the extent that their milk boosts total revenue higher than the Canadian Dairy Commission target, there will be a off-setting price reduction for milk that’s not so rich – i.e. mainly Holsteins.

The pricing policy change reflects reduced demand and prices for skim milk powder. The Dairy Commission buys up any surplus that doesn’t clear on the food market and diverts it either into strictly-limited export markets or to other domestic uses such as calf milk replacers or livestock feeds.