February 11, 2011

South Korea mulls dairy cow imports after FMD outbreak

South Korea is deciding over importing dairy cows this year to make up for animals destroyed in the latest FMD outbreak, the farm ministry said Thursday (Feb 10).

Under existing rules, Seoul can allow imports of up to 1,067 head of dairy cows per year without levying of duties under a minimum market access arrangement, which can help replenish lost livestock and help increase milk production, it said.

"A review of importing cows may be possible in the second half of this year after the FMD outbreak is contained. If a decision is made, cows will likely be imported from Australia and New Zealand that are considered free of mad cow disease," the ministry said.

The number of dairy cows destroyed account for 7.9% of the total animals in the country with the ministry confirming that its powdered milk stockpile has fallen to just 1,000 tonnes from 5,000-6,000 tonnes, which is considered adequate.

Because so many animals had to be destroyed, output from the remaining cows may reach 1,905 tonnes for the whole of 2011, which is smaller than the 1,939 tonnes that is needed by the country, the ministry said.

In addition, the ministry said efforts will be made to deal with short-term supply and demand imbalances. It said local dairy farms are to be allowed to increase milk production, with the government to adjust tariff quotas on milk imports.

"Production quotas set for local dairy farms to be raised by 4-5% for the next two years to help boost supply, with 9,000 tonnes of whole and skim powdered milk products to be imported under a tariff quota arrangement that can stem price hikes," the farm ministry said.

The shortfall has caused prices of milk to go up, with a kilogramme of powdered skim milk reaching an average of KRW7,000 (US$6.24) last year from KRW5,409 (US$4.82) in 2009.

The ministry, meanwhile, said that local milk production will be mainly sold on the domestic market as fresh milk, with imported powdered milk to be used to make various dairy products, breads and crackers.