The Canadian Dairy Commission (CDC) has released new Cost of Production (COP) survey results showing another rise in farm costs for 2024. However, easing feed and interest expenses are helping slow the pace of increase heading into 2025.
The 2025 indexed cost of production (iCOP) was set at $92.82 per hectolitre, up 2.7% from $90.36 in 2024. The CDC said on-farm efficiencies were not enough to offset higher capital and labour costs. Rising interest rates pushed up depreciation and return-on-equity expenses, while labour costs climbed due to workforce changes and higher wages.
Last year’s iCOP ($90.36/hl) underestimated the standardized 2024 survey results ($93.45/hl) by $3.09/hl, underscoring inflation and financing pressures. Recently, both purchased feed and interest rates have declined. When indexed, those lower costs reduced the COP by $0.63 per hectolitre, suggesting early signs of stability.
The National Pricing Formula (NPF) combines 50% of the annual iCOP change with 50% of the Consumer Price Index (CPI). Over the 12 months ending August 2024, the CPI rose 1.93%, producing an NPF result of 2.3255%. This number typically guides the February 1, 2026, milk price adjustment. The CDC noted that the figure “does not necessarily translate into a final price adjustment.”
Stakeholders have until October 14, 2025, to decide whether to invoke the exceptional circumstances mechanism. Doing so would pause the NPF result and trigger consultations on a potential price review and the support price for butter. If no review is requested, the NPF result will apply.
The CDC will hold stakeholder consultations October 21–24, with a final pricing announcement expected by October 31, 2025. Any approved changes will take effect February 1, 2026.
For more details, visit the CDC’s survey results and National Pricing Formula update page.
