Farmers will get 2.2% more for their milk next year — and retail prices could go up, too

The Canadian Dairy Commission says the so-called farm gate price for dairy will increase by another 2.2 per cent starting in February, as the supply managed industry says its costs continue to rise.

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. 

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 group raised the farm gate price by 8.4 per cent in February, just as inflation was walloping every part of Canada's economy. The group then took the almost unprecedented step of raising prices a second time in the same year, by another 2.5 per cent, starting Sept. 1.

That works out to another roughly two cents per litre.

The new prices will come into effect starting in February, once they are approved by the various provincial bodies.