Canada’s farmgate milk price to rise by 2.8% in 2027, Canadian Dairy Commission says

Canada’s farmgate milk price will increase by 2.8% next year, the Canadian Dairy Commission said Friday (Oct. 30). 

That translates to $0.0259 per litre, or just under three cents per litre of milk, and follows a 2.3% increase in 2026.

The CDC is also increasing its carrying charges, which are collected to partially offset the cost of storage systems. 

The adjustments 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.

Changes will come into effect Feb. 1 following approval by provincial authorities later this year. 

The CDC sets the farmgate milk price annually following review and consultations with stakeholders. 

This year, stakeholders included Dairy Farmers of Canada, Dairy Processors Association of Canada, the Canadian Federation of Independent Grocers, Restaurants Canada and the Retail Council of Canada. 

The Consumer Association of Canada was not consulted this year as they ceased activities in 2024. The CDC said it launched a call for a new consumer representative for future consultations in early 2025 but was unable to secure a fitting organization. 

The final cost of dairy products in food stores are also influenced by supply chain factors such as labour, transportation, distribution and packaging costs.

"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,” said CDC chair Jennifer Hayes in a press release.

This year, the National Pricing Formula (NPF)—which 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)—indicated a 3.5548% increase for 2027. 

The CDC said its decision to apply a lower increase than the NPF’s calculation reflects its objective of “ensuring fair returns to dairy producers,” while supporting “a dairy sector that can respond to evolving consumer demand, including growing interest in higher-protein dairy products.”