The farm gate price will increase by about two cents per litre as of Sept. 1, an increase of 2.5 per cent.

The rate hike was announced Tuesday afternoon by the Canadian Dairy Commission (CDC), a crown corporation that says the sector is dealing with higher prices due to inflation.

The mid-year price increase is being done under “exceptional circumstances,” the CDC says. Milk pricing is typically adjusted just once per year.

“The increase in producers’ revenues will partially offset increased production costs due to inflation. Feed, energy, and fertilizer costs have been particularly impacted, with increases of 22 per cent, 55 per cent and 45 per cent respectively since August 2021,” reads a news release from the CDC.

The first price increase for the farm gate price of milk this year happened on Feb. 1 when costs increased by six cents per litre, or about 8.4 per cent. This second price increase will impact the retail price of all dairy products, the group said.

“The adjustment will increase by 2.5 per cent on average the price for milk used in the manufacture of dairy products such as milk, cream, yogurt, cheese and butter intended for the retail sector and the foodservice industry,” the CDC said.

The latest price increase will be deducted from the regular adjustment, slated to take place next February, the CDC said.