OTTAWA, ON, Oct. 31, 2025 /CNW/ - In October 2025, the Canadian Dairy Commission (CDC) conducted the annual review of Canadian farmgate milk prices. As a result of this review and consultations with stakeholders, the following changes are intended to be implemented on February 1, 2026.
The result of the National Pricing Formula (NPF), a pricing mechanism that was determined by the industry, which considers dairy farmers' costs of production as well as the consumer price index, is an increase of 2.3255%.
While Canada's inflation rate remained within the target range throughout 2024, producers continued to face upward pressure on costs. The cost of animal feed and labour contributed to sustained cost pressures.
This increase reflects a balanced approach that aligns with recent inflation, which rose to 2.4%, and food price trends, which rose to 4.0% in September. The increase supports dairy producers in managing rising input costs while maintaining affordability and stability for Canadian consumers.
In addition, the CDC's carrying charges will increase. The CDC collects carrying charges to partially offset the cost of storage programs.
The combined effect of the NPF and the adjustment to carrying charges will result in an increase in the cost of milk used to make dairy products such as milk, cream, yogurt, cheese and butter for the retail and restaurant sectors of 2.3750%, which translates to just over 2 cents per litre of milk sold to processors to produce finished dairy products.
The net impact of these increases on the final cost of dairy products is unknown since prices are also influenced by incremental factors further along the supply chain such as labour, transportation, distribution and packaging costs. A change in price paid to farmers for their milk does not necessarily translate to a similar consumer price change.
The CDC is grateful to the following stakeholders for their contribution to this year's milk pricing review process: Dairy Farmers of Canada, Dairy Processors Association of Canada, Canadian Federation of Independent Grocers, Restaurants Canada, and Retail Council of Canada.
The new farmgate milk prices will become official once they are approved by provincial authorities later in 2025.
Quote
"Although Canada's inflation rate stayed within the target range throughout 2024, producers faced ongoing financial challenges due to higher animal feed and labour costs . Next year, the farmgate price of milk will see an increase that is aligned with inflation but that captures the increase in the cost of producing milk. These dynamics underscore the importance of ongoing monitoring and responsive policy to ensure affordability for consumers, viability for producers, as well as sector stability. We thank our stakeholders for their continued participation and support in our pricing consultation process."
Jennifer Hayes, Chair
Canadian Dairy Commission
Quick facts
- The 2.3255% increase is the result of the National Pricing Formula, a pricing mechanism that was determined by the industry. It takes into account 50% of the variation in the indexed cost of production as well as 50% variation in the consumer price index.
- Regulating the price of milk is one of the elements of the supply management system for dairy. However, only the price of milk that farmers get is regulated. With the exception of fluid milk in some provinces, the retail price of dairy products is not regulated in Canada. After the milk leaves the farm, it enters the market where supply, demand and other factors influence the price.
- Farmgate milk price adjustments may have an impact on the retail price of all dairy products, although the size of the impact will depend on decisions of players along the supply chain regarding their own costs.
- Over the past year, the average annual Consumer Price Index (CPI) for dairy products increased by 2.7%, a rate similar to the overall food category, which increase by 2.5%. However, this growth was slower than most other food categories, with the exception of fish, seafood, and other marine products.
- In the last five years, prices for dairy increased at a comparable rate (21%) to all food products (24%). Comparable sources of protein such as eggs increased by 28% and meat by 26%.
Useful links
- Information on the methodology of the cost of production survey and pricing
- Details on the cost of production survey
- Frequently Asked Questions on the Price of Milk
SOURCE Canadian Dairy Commission
For more information, please contact: Philippe Charlebois, Executive Director, Corporate Services, Tel.: 613-220-5238, Email: [email protected]
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