The Canadian Dairy Commission has announced a 2.2 percent increase in the farm gate price for dairy, starting February 2023.
The Crown corporation, which oversees Canada’s supply managed dairy system, announced the amount that farmers will receive for their product starting in February, a metric known as the farm gate prices.
In Canada, the dairy industry operates under what’s known as a supply management system, where the prices that producers get for things like milk, cream, yogurt and cheeses are set at a level that ensures production and sustainability for the industry.
It comes after the commission approved two price hikes in 2022: A 2.5 per cent increase, or roughly two cents per litre, in September and an 8.4 per cent increase, or six cents per litre, in February.
Altogether, the total 12-month farm gate milk price increases amount to roughly 10 cents per litre, or 13.1 per cent.
Prices can vary at the retail level, but one of the effects of supply management is to set a baseline price that farmers can expect for their basic product when it leaves the farm.
The increase planned for February will become official once approved by provincial authorities.
The price hike will see all dairy products — including butter, cheese, ice cream and yogurt — increase in price though some products will be affected more than others.
“It applies to all products but not all products will be impacted the same way because they use a different mix of fat and protein in the final recipe,” said Matthew Gaudreau, the dairy commission’s director of policy and economics.
“The 2.2 per cent applies to milk going into all dairy products, but it won’t impact all dairy products in the same way.”
