The Canadian Dairy Commission (CDC) reviewed farmgate milk prices in October 2024, consulting with stakeholders to introduce minor price adjustments effective February 1, 2025:
- Farmgate Milk Price Adjustment: The farmgate price will decrease by 0.0237%, less than one cent per liter. This reduction stems from the National Pricing Formula, which considers dairy farmers’ production costs and the consumer price index. Despite high inflation, lower feed costs and increased farm productivity helped balance production costs, enabling the price cut.
- Retail Price Impact: While milk used in products like yogurt and cheese will see a cost reduction, the retail price effect remains uncertain, as retail prices also depend on labor, transport, and other supply chain factors.
- Butter Support Price: The CDC will lower the support price for butter from $10.3505 to $10.3489 per kg, a decrease attributed to lower milk component prices. The support price is used in the CDC’s Domestic Seasonality Program to stabilize butter supply and demand by buying and storing butter when supply exceeds demand, typically in spring, and selling it in high-demand seasons.
- Regulation and Market Factors: While farmgate milk prices are regulated, retail prices generally are not, and adjustments depend on supply and demand. The CDC credits industry stakeholders for their participation in the pricing review.
These changes await provincial approval, with final implementation expected in early 2025.
