The CDC conducted the annual review of Canadian farmgate milk prices with stakeholders, which will translate to just under 3 cents per litre of milk.
The CDC also revealed it will increase its’ carrying charges, which partially offset the cost of storage programs.
It confirmed 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 CDC said the impact of these increases on the final cost of dairy products is “unknown” since prices are also influenced by other factors further along the supply chain such as labour, transportation, distribution and packaging costs.
The new farmgate milk prices will become official once they are approved by provincial authorities later in 2026.
“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,” said Jennifer Hayes, Chair CDC.
“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.”
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 CDC also announced an increase to the support price for butter that will be effective February 1, 2027. The support price for butter will increase from $10.5662 per kg to $10.6366 per kg.
The support price contains three elements: carrying charges, the processors’ make allowance and the price of milk components.
The CDC’s carrying charges will increase from $0.0254 per kg of butter to $0.0312 per kg of butter.
