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Canadian Milk Prices Rise Following Annual Review by Dairy Commission

Canada 08.05.2024
Source: The DairyNews
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The price of milk in Canada has experienced a modest increase of 1.77%, affecting the cost of dairy products such as milk, cream, yogurt, cheese, and butter across the retail and restaurant sectors.
Canadian Milk Prices Rise Following Annual Review by Dairy Commission
This adjustment, which began on May 1, is not due to the recent testing for avian flu by the federal government but rather stems from the annual evaluation of farm gate milk prices by the Canadian Dairy Commission (CDC).

Farm gate milk prices are the rates that dairy farmers receive directly at their farms. These prices are controlled by the Canadian government through supply management systems designed to stabilize dairy farmers' incomes and align milk supply with domestic demand.

The CDC is instrumental in determining these prices. It considers various factors including feed costs, labor expenses, and other operational costs. The prices are calculated using a cost-of-production formula and are adjusted annually to reflect changes in production costs, market conditions, and regulatory factors such as import controls and production quotas.

The effect of these price adjustments on the final retail price varies, as these regulated farm gate prices only apply to the initial sale from the farm. Beyond this point, the market dictates the final price based on numerous influencing factors.

Torsten Hemme, Founder & Chairman, Dairy expert
Torsten Hemme, Founder & Chairman, Dairy expert
Rebecca Marquez
Rebecca Marquez
Director of Custom Research at PMMI
Private-label products, sometimes known as private brands or store brands, have enjoyed steady growth since even before the COVID-19 pandemic. And dollar sales continue to grow. In 2023, total dollar sales rose 6%, while units sold grew 0.9% compared to the prior year. Often presented as the lower-cost option, high inflation has helped the private-label market, which is valued at more than $217 billion, according to a report from Chicago-based market research firm Circana.