Programs > Seasonality
These programs allow the CDC to work with the private sector to balance the seasonal demand and supply of products for the domestic market. When milk production exceeds requirements for the Canadian market, the CDC buys butter and skim milk powder from processors at established support price levels. Support prices are also used as a guide by provincial milk marketing boards and agencies when they establish provincial milk class prices.
A pre-determined "normal" level of butter stocks is set as a target level deemed to be a necessary reserve to ensure the domestic market is supplied throughout the year. Within this level, a small quantity of Plan A bulk butter stocks is held as a buffer against seasonal deficiencies in the domestic market. Plan B is used by firms to balance the seasonality of their production and sales over the calendar year.
Manufacturers are encouraged to produce evaporated and sweetened condensed milk during periods of the year when milk supply exceeds domestic needs, and are offered financial assistance under the Canadian Milk Assistance Program to offset costs associated with additional product storage time. A Plan B program for skim milk powder encourages the production of various specialty types of skim milk powder when milk supplies are plentiful, thereby minimizing the demand for fresh skim milk solids in the fall when milk production is traditionally low.
Producers pay the total storage, transportation and interest costs incurred by the CDC on butter above the normal stock level, and other domestic seasonality programs.
A pre-determined "normal" level of butter stocks is set as a target level deemed necessary to ensure the domestic market is supplied throughout the year. To cover the financing, storage and transportation of normal levels of butter stocks, an amount of $0.07 per hectolitre of milk is collected from the marketplace through the butter support price.
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