Understanding the Recent Increase in Milk Prices in Canada

incomes and align milk supply with domestic demand.

The CDC, responsible for setting these prices, considers various factors including feed, labor, and other operational costs. This year, the price of milk has been adjusted by 1.77%, an increase of approximately $0.0153 per liter. This change is based on the National Pricing Formula, which accounts for half of the dairy farmers’ production costs and half of the consumer price index.

The price increase, although seemingly small, reflects broader economic pressures such as inflation and rising interest rates, which impact the entire dairy value chain from production to consumer sales. Last year’s increase was slightly higher at 2.2%, driven by rising costs for feed, fertilizer, and fuel, alongside higher interest rates and supply chain disruptions. The new prices, reviewed last October and approved by provincial authorities in December, came into effect on May 1, 2024, after a delay from the initially planned date in February. This adjustment As of May 1, Canadians Commission (CDC). This price affecting dairy production. and dairy products across the affects not only the price of milk have begun to notice a rise in adjustment is not related to Farm gate milk prices, which are country. These prices are set but also other dairy products like milk prices due to the annual health concerns such as avian the prices dairy farmers receive through a regulated supply cream, yogurt, cheese, and review of farm gate milk prices flu but rather reflects changes in directly at their farms, are crucial management system, which butter across retail and by the Canadian Dairy the economic environment in determining the cost of milk aims to stabilize dairy farmers’ restaurant sectors.