Farmgate milk prices to rise 2.3% on Feb. 1, 2026
The Canadian Dairy Commission will raise farmgate milk prices by 2.3% starting Feb. 1, 2026. The change may add a few cents per litre to milk sold to processors.
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By Torontoer Staff
The Canadian Dairy Commission will increase the farmgate price of milk by 2.3 per cent, effective Feb. 1, 2026. The change affects the price paid to dairy producers and will raise the cost of milk sold to processors.
The increase comes after the CDC's annual review of farmgate prices, which considers producers' costs and the Consumer Price Index. The organisation says the adjustment reflects higher production costs rather than a direct retail price change.
What the increase covers
The farmgate price is the amount processors pay farmers for raw milk. It is one component of Canada's supply management system for dairy. The CDC sets that price based on production costs and inflation, but retail prices for most dairy products are set by market forces after milk leaves the farm.
Although Canada’s inflation rate stayed within the target range throughout 2024, producers faced ongoing financial challenges due to higher animal feed and labour costs.
Jennifer Hayes, CDC chair
How this may filter through to grocery prices
The CDC says the 2.3 per cent farmgate increase will raise the cost of milk used to make products such as yogurt, cheese, butter and ice cream. That translates to just over two cents per litre of milk sold to processors, according to the commission. Retail prices may rise, but the net effect on grocery bills is uncertain.
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.
Canadian Dairy Commission
Processors and retailers face their own costs. Labour, fuel and packaging prices can blunt or magnify the effect of a farmgate adjustment. In some provinces, fluid milk retailers operate under specific rules, but most dairy products compete in the open market.
Which dairy items could be affected
- Fluid milk sold to processors, which is used in many finished products
- Yogurt and cultured dairy products
- Cheese, including mass-market varieties
- Butter and cream
- Ice cream and frozen dairy desserts
Any change in retail price will vary by product, brand and region. High-volume, commodity-style products are more likely to show measurable price movement than niche or premium items.
Context and recent trends
Dairy inflation in 2025 was roughly in line with broader food inflation. The CDC last raised farmgate milk prices by 2.2 per cent in 2023. The commission reviews prices annually to account for changes in feed, labour and other inputs.
Supply management in Canada governs production and farm-level pricing for dairy, poultry and eggs. The system aims to provide stable returns for farmers and a predictable supply of domestic product, while other parts of the supply chain determine retail pricing.
What shoppers should watch for
Expect small, incremental changes rather than sudden jumps. Look for modest price adjustments on staple dairy items over the coming months, but remember those changes may be spread out or offset by promotions, private-label pricing and retailer decisions.
If you track grocery costs, compare unit prices and sizes rather than sticker prices alone. That will make it easier to spot genuine price movements tied to input-cost changes rather than packaging or promotional shifts.
The CDC's farmgate adjustment is a reminder that input costs influence the food system at multiple levels. Consumers will see effects unevenly across products and regions, depending on how processors and retailers absorb or pass on the higher farm price.
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