Farmgate milk price to increase by 2.8 per cent in 2027

This story was first published on RealAgriculture.com on Nov. 2, 2026.

The Canadian Dairy Commission has announced changes to the price paid to farmers for their milk, which take effect on February 1.

Following an annual review of Canadian farmgate milk prices, the commission said the farmgate price of milk will increase by 2.8 per cent, which translates $0.0259 per litre (or just under 3 cents per litre of milk).

Read more:

• Monette Farms bidding window extended into November
• Saskatchewan to adopt new approach for agricultural Crown land leases
• Ag groups call for major tax reform

This increase is lower than the 3.5548 per cent increase calculated using the National Pricing Formula. The commission said that’s because the criteria for temporarily suspending the formula were met, and the Canadian Dairy Commission board consulted with stakeholders to conduct a “detailed analysis to better understand the current economic and industry context.”

The pricing formula calculates the farmgate price using 50 per cent of the annual change in the indexed cost of production and 50 per cent of the annual change of the Consumer Price Index.

“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,” said Jennifer Hayes, chair of the Canadian Dairy Commission.

“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.”

In addition to the adjustment to the farmgate price of milk, the commission will increase its carrying charges. The commission collects carrying charges to partially offset the cost of storage programs, it says.

The adjustment to the farmgate price of milk, along with the adjustment to carrying charges, will result in a total increase of 2.8245 per cent 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 dairy commission said the net impact of the increases on the final cost of dairy products is unknown, as 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 commission said in a news release.

Over the past year, the average annual Consumer Price Index for dairy products increased by 1.9 per cent, which is lower than the increase of 4.2 per cent in the average annual Consumer Price Index for food. The 1.9 per cent increase in the dairy products price index was lower than the increases seen in other food sub-categories, with the exception of eggs, bakery and cereal products. In the last five years, price indices for dairy increased at a comparable rate (24 per cent) to all food products (29 per cent). This compares to increases of 34 per cent for meat and 20 per cent for fish.

The new farmgate milk prices will become official once they are approved by provincial authorities later in 2026.

The cost of production survey can be found on the commission’s website.