Reduction in the price of milk on farm for 2025

The Canadian Dairy Commission (CCL) announces that a reduction in the price of milk produced on farm will be in effect starting February 1, 2025. The price of milk on farm will be reduced by 0.0237%, which translates by less than one cent per liter of milk sold to processors. The price was calculated according to the national pricing formula which takes into account dairy producers’ production costs as well as the consumer price index.

“Although the general inflationary environment was higher than Canada’s targets in 2023, productivity gains on the farm and the decline in the cost of certain inputs, such as animal feed, helped to balance production costs in their entirety. together,” quotes the CCL.

CDC President Jennifer Hayes noted that producers have managed to find a balance despite the challenges posed by inflation. “Despite the persistent inflationary environment, producers’ efficiency and productivity gains helped balance dairy farm costs this year, thereby lowering the cost of production. The national pricing formula and our consultation process clearly captured this reduction. »

The organization points out, however, that the drop in the price paid at the farm will not necessarily result in a reduction equivalent to that established next February, since many factors, relating to processors, could cancel it out. These factors include labor, transportation, distribution and packaging costs.

Over the past year, the average annual consumer price index (CPI) for dairy products increased at a slightly slower rate (2.0%) than that for all food products (3.4%). ). In the past five years, the average annual CPI for dairy products has increased by 23.8%. In comparison, the index for meat increased by 29.5%, that for eggs by 40.2% and that for fish by 15.1%.