2026 increase to farmgate milk price aligned with inflation

 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.