Oil-Dri Hikes Prices to Offset Rising Health, Freight Costs

Oil-Dri Corporation of America (ODC) plans to raise prices on most of its products during the first quarter of fiscal 2027, the company said Wednesday. The increases address higher costs in health insurance and freight. Resin-based packaging expenses have also risen.

President and CEO Daniel S. Jaffee said the company does not take price increases lightly. Rising costs made the adjustment necessary. "Rising external costs have made this adjustment necessary in order to maintain the high quality of our products and service levels," Jaffee said in a statement. He added that Oil-Dri is pursuing productivity and cost-reduction initiatives on things within its control.

The specialty sorbent maker controls the full process from research to sales through vertical integration. That structure provides insulation from some supply disruptions but does not shield it from broad-based input-cost inflation. The largest cost pressures come from health insurance premiums and freight rates. Packaging materials tied to resin prices have also climbed.

Oil-Dri sales representatives will communicate the specific price adjustments directly to customers. The increases take effect in the fiscal first quarter, which begins in August.

The announcement follows a period of strong financial performance. The company earlier this year reported record quarterly revenue and boosted its dividend and share buyback program. The dividend streak now extends 23 consecutive years. Those results showed confidence in the core business. The pricing decision shows that margin pressure is significant enough to pass costs to customers.

Oil-Dri serves pet care, animal health, fluids purification, agricultural, and industrial markets. Its clay-based sorbents face competition from synthetic alternatives. Vertical integration and long customer relationships provide pricing power. Whether the price increases stick will depend on competitor responses and whether customers accept the higher costs or seek alternatives.

Timing matters. The price hikes arrive early in the fiscal year, giving Oil-Dri a full year to benefit if costs remain stable. The company is also pursuing internal cost cuts, which could add a second lever for margin protection. Jaffee thanked customers for their understanding and continued collaboration.

The full scope of the price increases will emerge as sales representatives reach out to customers. The next quarterly filing will show customer retention and volume trends.