A $300 million plan to bring butter production back to BC

An Abbotsford dairy company hopes to construct a massive new processing facility that will be financed by what it says would be the largest investment in the history of Canadian dairy.

Three out of every four glasses of BC milk originate in Fraser Valley cows. But every drop of milk must be processed, and current facilities are at capacity. In 2019/2020, BC produced around 840 million litres of dairy products. Vitalus Nutrition’s proposed new facility would increase its processing capacity by 370 million litres and allow farmers to expand production, the company said in an application to the Agricultural Land Commission.

The expansion would take place on a Downes Road property just east of Vitalus’ current facility and cost upwards of $300 million. The money would come from both Vitalus and the milk boards of Canada’s western provinces.

(The milk boards oversee Canada’s supply-managed dairy industry and are in charge of regulating milk production, as well as allocating the quotas that determine who can produce how much butter fat.)

Vitalus says the expansion would allow it to process more cream and enable the large-scale production of made-in-BC butter. It would also allow Vitalus to ramp up processing of more milk protein concentrate products, which are used in things like dietary supplements, and prebiotics. (Vitalus is the only plant in North America that produces prebiotics from milk products.)

The expansion would also allow Vitalus to better fulfil its role as the “plant of last resort” for the western provinces. As the plant of last resort, Vitalus is responsible for having the capacity to process and store any excess milk produced by dairy farms; the BC Farm Industry Review Board described the system as the “‘balance wheel” for the province’s milk supply system, enabling milk to be processed and directed as priorities shift.

Vitalus is not the first plant of last resort in the Fraser Valley, and its expansion would be following in a long local tradition of milk processing. Chilliwack’s A.C. Wells was the first person to specialize butter production in BC, using a centrifugal separator to help local farmers extract the cream from their milk in the late 1800s. He hired an Ontario cheese and butter maker to help him open a creamery to process his own milk, and in 1896 started Edenbank Creamery, the first co-operative creamery in BC. The Fraser Valley Milk Producers’ Association, another local co-operative, also held the first contract for BC’s plant of last resort in the 1950s.

Nowadays, being the plant of last resort comes with financial perks, in part because of the cost associated with maintaining a facility ready to take on excess milk. In 2020, the plant of last resort time received more than $3 million from BC’s Milk Marketing Board alone. Vitalus was named the plant of last resort in April of this year.

Vitalus did not respond to The Current’s request for comment, but it explained the rationale for its project in a detailed proposal to the ALC, which must approve the construction of any non-farm facility on ALR land. To be allowed to proceed, Vitalus had to convince the land commission that the project will be a net benefit to farmers. Its argument was simple:

“Dairy processing facilities in BC are at full capacity and as a result, limits dairy farmers to expand production,” it said. “The expansion of the Vitalus facility will increase the currently strained dairy processing capacity in Western Canada” and provide a major benefit to local dairy farmers.

The ALC agreed—kind of. While Vitalus had asked for a portion of the parcel to be removed from the Agriculture Land Reserve altogether, the ALC decided last week that the land can be used for the expanded processing facility, but must stay in the ALC. Now the City of Abbotsford must also sign off on the proposal, which requires both rezoning of the Downes Road property and an Official Community Plan amendment.