Milk production is up on P.E.I. because people are eating more butter

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Dairy Farmers of Manitoba shoot back at Trump after he calls out Canadian industry

Dairy farmers are producing more milk these days on P.E.I.

That's because demand for butter is on the rise across North America.

But other trends south of the border are causing farmers to be concerned.

At Wednesday's annual meeting of Dairy Farmers of Prince Edward Island in Summerside, producers heard milk production in 2016 hit 109 million litres.

That's an increase of eight-and-a-half per cent compared to the year before.

Producers also heard concerns about trade relations with the U.S. under president Donald Trump.

Dairy farmers fear supply-management — Canada's strict system of controls on pricing and production of milk — will come under attack.

"We have been in negotiations with trade policy before ... and we've survived those and continue to prosper."

Rising demand for butter is part of the reason for concern.

For every pound of butter produced, there's skim milk left over as a byproduct. U.S. and Canadian farmers are finding themselves in a price war as they try to sell off excessive stock piles of powdered skim milk.

At Wednesday's meeting, dairy farmers heard Canada has lowered its industrial skim milk prices to match the U.S.

At the same time, Canada is ramping up construction of new processing facilities to handle skim milk and other dairy products.

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