Abbotsford's massive dairy expansion to come online in 2027

The expansion of an Abbotsford plant aimed at turning milk into proteins, prebiotics, and butter is likely to be complete by the fall of 2027—and local dairy farmers have been told to prepare to up their production.

In 2022, The Current reported that processor Vitalus Nutrition was looking to undertake a $300 million expansion on Downes Road in Abbotsford. The expansion, an ALC application said at the time, would allow the company to process more cream and butter—as well as milk concentrate products, which are used in things like dietary supplements. It is the only plant in North America that produces prebiotics from milk, and is also the “plant of last resort” for western Canadian dairy farmers.

(You can read more about that here.)

The expansion is on track to be finished in 2027, and could create around 100 new jobs in the community, Phil Vanderpol, Vitalus’ president and CEO, said in an emailed statement.

In January, the BC Milk Marketing Board sent a notice to BC’s dairy farmers, telling them to prepare for the expansion project. Production at the new plant will take about four years to get up to full speed, the marketing board said, but farmers will need to increase production much sooner.

According to the marketing board, farmers in BC, as well as Alberta, Saskatchewan and Manitoba, will need to start making more milk by 2027. When it is fully operational, the plant will need 18% more milk than western cows are currently producing, or roughly 425 million litres a year.

The Vitalus expansion isn’t the only new processing plant in BC—a sign of growth that BC Dairy general manager Jeremy Dunn said was sorely needed. Although Vitalus’ expansion is the largest in the province, others are also in the works. Punjab Milk Foods in Surrey, for example, received $7.5 million from the provincial government in 2023. It produces foods like paneer, ghee, and dahi under the brand Nanak Foods, and was expected to complete its expansion earlier this year. Dairy Innovation West, a milk concentration plant in Alberta that uses milk from across western Canada, is also set to officially open this spring.

Because BC’s dairy industry is organized with supply management, any increases in production are distributed equally. If an industry board decides the amount of milk should increase by 18%, then each farm is assigned 18% more quota—the volume of milk each farm is allowed to produce.

“Dairy producers have been looking for growth [in the industry] for some time,” Dunn said. “And now each farmer [will look] at how to best produce a bit more milk within their own farm.”

Some decisions focus on how to increase their herd—either by raising more cattle themselves, or importing more cattle from places like the United States. (You can read more about the challenges of that in our article on avian influenza here.) The increased quota will also mean farmers will have to decide if they have enough land or barn space to support a larger herd, or if higher up-front feed costs will be exceeded by larger milk payments. Farmers may also consider it more lucrative to let others farm. Those who choose not to increase their herd can sell their quota to existing or incoming farmers, who would then take on that production.

The BC Milk Marketing Board told producers that the board is creating a schedule to stage the increases needed for the Vitalus expansion, so the bump doesn’t happen all at once. The plan and schedule is expected to be released to producers this spring.

It’s not yet clear how the increase in production will affect consumer prices. Prices are set by the Canadian Dairy Commission using a relatively complex formula, and approved by the BC Milk Marketing Board. Farmers are paid a blended price based on where their milk goes—milk destined to become butter has a different price than milk destined for a chocolate bar. The cost of production—including how expensive feed is—and the consumer price index also plays into the pricing decisions.

The Current reached out to the BC Milk Marketing Board to ask about dairy pricing and how changes in production could affect consumers, but did not receive a response.

Dunn said the price paid for milk “doesn’t necessarily go up and down based on the volume in the marketplace.” In other words, supply and demand doesn’t drive the prices of Canadian milk..

It’s not yet clear what effects incoming American tariffs will have on the dairy industry.

Tariffs are unlikely to change consumer costs for many dairy products in BC, since most dairy bought in the province is produced here.

In a statement, Vanderpol said Vitalus was a “global leader in value-added specialty dairy ingredients,” and that the company’s products were used both in Canada and abroad, but did not elaborate on any potential impacts.

Trump has complained in the past about Canada’s dairy industry, which has fairly strict rules around the imports of dairy products because of supply management. Canadian rules include a tariff rate quota, which gives foreign countries a relatively small amount of product they can send to Canada before being hit with extremely high tariffs. Last year, Canada imported $1.4 billion worth of dairy products. Canada exported just $293 million worth of dairy products.

According to the US-based International Dairy Foods Association, the United States have “never gotten close to exceeding” Canada’s zero-tariff quota.

On Friday, March 7, Trump announced he would impose reciprocal tariffs on Canadian dairy coming into the United States at undecided time, saying Canada had been “ripping us off for years.” As of Friday, March 14, those tariffs were not in place.

Although dairy producers are fairly removed from conversations about trade, Dunn said tariffs are still a concern.

“Like all Canadians, dairy producers are certainly concerned about the threat of tariffs from the US and the trade dispute that seems to be coming between the countries," he said before general tariffs came into effect in March. “That creates uncertainty, that creates stress, and it certainly has all of us concerned.”