Highlights
- Average Canadian prices for dairy products such as yogurt, butter, and cheese were lower than average national prices in the U.S. in 2025.
- Canadian dairy prices have been in line with or lower than overall food inflation in recent years.
- In 2025, food inflation rose 3.2% year over year, compared to 2.1% for dairy.
Canadians are right to be concerned about rising grocery costs; dairy farmers and their families feel that pressure too. So why is supply management often singled out in grocery affordability debates? It’s time to take a closer look at dairy prices.
How is the price farmers get for milk determined?
The price of milk at the farm level is regulated consistently by the Canadian Dairy Commission (CDC), a federal regulatory agency. It is based on a pricing formula that is applied nationally. The formula takes into account national inflation as well as farmers’ costs of production. Depending on these variables, it can decrease or increase.
In 2026, that price increased by 2.32%, but it decreased by 0.0237% in 2025. Few industries’ prices are so transparent and stable.
What if dairy farmers’ costs go up during the year?
Like all farmers and business owners, dairy farmers often face increasing input costs —fuel, feed, labour, transportation, to name a few.
Even if farm input costs vary during the year (e.g., rising diesel prices, increases in fertilizer costs), the price dairy farmers are paid for milk stays the same until the CDC conducts its next review and farm gate prices changes are implemented.
Do dairy farmers set the retail price of dairy products?
Dairy farmers do not set the retail price of milk. And like most grocery products, milk goes through a supply chain.
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Farms produce the milk.
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The milk is transported from the farm to a processor.
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Processors pasteurize and package the milk or turn it into products such as cheese, yogurt and butter.
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Retailers and restaurants sell the products to consumers.
At every stage, value is added and pricing decisions are made. That’s why when the farm price set by CDC decreased in 2025, retail prices didn’t automatically follow.
Are dairy prices rising faster than other food prices?
The inflation on retail dairy prices has been in line with or lower than overall food inflation in recent years. In 2025, food inflation rose 3.2% year over year, compared to a 2.1% increase for dairy.
How do Canadian dairy prices compare to those in the U.S.?
Canadian dairy retail prices are also competitive with those in the U.S. Data available from Statistics Canada and the U.S. Bureau of Labor Statistics show average Canadian prices for dairy products such as yogurt, butter, and cheese were lower than those in the U.S. in 2025.
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Yogurt - $2.09 (CAD) / kg lower in Canada
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Cheese - $4.26 (CAD) / kg lower in Canada
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Butter - $2.03 kg (CAD) / kg lower in Canada
Canadian retail milk prices were approximately $0.19/litre (CAD) higher than in the U.S. – but were lower than in many other developed countries, according to data from the International Dairy Federation.
Many countries provide direct production subsidies to farmers, meaning consumers in those countries pay for their dairy at the grocery store and again through taxes. Dairy farmers in Canada do not benefit from any direct production subsidies.
Supply management and the value of food sovereignty
Every hard-earned dollar that Canadians spend matters: dairy farmers are confident in the high-quality food we bring to the table and the value that our industry brings to Canada’s food system.
Our work and the supply management system in which we operate help feed Canadian families, while strengthening rural communities, our national economy, and Canada’s food sovereignty.