The gap between the two figures is a main reason for the quota increase.
"This decision is intended to ensure P5 milk production continues to fill all current demand, as butter stocks have not surpassed their updated target level of 35,000 tonnes,” DFO said in its statement. “Demand for dairy products continues to be strong while P5 processing capacity has increased since the beginning of April but continues to be closely monitored.”
The quota increase means some dairy producers could need to increase their herd.
"That means you have to have five per cent more cows, five per cent more feed, five per cent more space available in your barn, five per cent more labour," Harold MacNevin, chair of the Dairy Farmers of Prince Edward Island, told CBC. “It’s quite an impact. It’s a welcome impact.”
If producers can reach the intended goal by July, it will help further supply processors with Canadian butter in 2017 and 2018, according to Dairy Farmers of Nova Scotia.
Farms.com has reached out to dairy producers for insight into how the quota increase could impact their operations.