OTTAWA, ON, Oct. 30, 2026 /CNW/ — In October 2026, 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 farmgate price of milk will increase by 2.8% on February 1, 2027, which translates $0.0259 per litre (or just under 3 cents per litre of milk).
In addition to the adjustment to the farmgate price of milk, the CDC will increase its carrying charges. The CDC collects carrying charges to partially offset the cost of storage programs.
The adjustment to the farmgate price of milk along with the adjustment to carrying charges will result in a total increase of 2.8245% in the cost of milk used by processors to make dairy products such as milk, cream, yogurt, cheese and butter for the retail and restaurant sectors.
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.
This year, the National Pricing Formula (NPF) indicated a 3.5548% increase. As the criteria for temporarily suspending the formula were met, the CDC Board consulted with stakeholders and conducted a detailed analysis to better understand the current economic and industry context.
The decision to apply a lower increase than the result of the NPF reflects the CDC’s objective of ensuring fair returns to dairy producers, who continue to improve efficiency and productivity while facing increasing cost pressures and broader economic uncertainty. It also supports a dairy sector that can respond to evolving consumer demand, including growing interest in higher-protein dairy products.
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 2026.
Quote
“While dairy farmers continue to improve efficiency and productivity on their farms, many of the cost pressures they face, including inflation, rising input costs, and broader economic uncertainty, remain beyond their control. At the same time, consumer demand continues to evolve, with growing interest in higher-protein dairy products. In this context, the CDC Board chose a measured and balanced approach that sets the farmgate milk price adjustment at a level comparable to inflation. This decision helps producers manage ongoing cost pressures while reflecting current market conditions and supporting the stability of Canada’s dairy sector. As consumer preferences continue to change, I am confident in our industry’s ability to adapt, innovate and meet Canadians’ expectations. I would also like to thank our stakeholders for their valuable participation throughout the pricing consultation process.”
Jennifer Hayes, Chair
Canadian Dairy Commission
Quick facts
- Regulating the remuneration for milk at farmgate is one of the elements of the supply management system for dairy. However, 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.
- The National Pricing Formula (NPF) calculates the farmgate price using 50% of the annual change in the indexed cost of production and 50% of the annual change of the Consumer Price Index (CPI)
- Farmgate milk price adjustments may have an impact on the retail price of all dairy products, but retail prices also depend on the decisions of other players along the supply chain. For other parts of the supply chain, the farmgate price of milk is an important factor in pricing, but not the only factor. This means that changes in retail prices may not match the farmgate milk price adjustment.
- Over the past year, the average annual Consumer Price Index (CPI) for dairy products increased by 1.9%, which is lower than the increase of 4.2% in the average annual CPI for food. This 1.9% increase in the dairy products price index was lower than the increases seen in other food sub-categories, with the exception of eggs and of bakery and cereal products.
- In the last five years, price indices for dairy increased at a comparable rate (24%) to all food products (29%). This compares to increases of 34% for meat and 20% for fish.
- The stakeholders that contributed to the CDC’s annual pricing process include Dairy Farmers of Canada, the Dairy Processors Association of Canada, the Retail Council of Canada, the Canadian Federation of Independent Grocers, and Restaurants Canada. The Consumer Association of Canada was not consulted this year as they ceased activities in 2024. The CDC launched a call for a new consumer representative for future consultations in early 2025 however was unable to secure an appropriate organization during that process The initiative has since been renewed.
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
