August 3, 2011

 

South Korea fights over milk price hike

 

 

South Korean farmers and dairy organisations are quarrelling over an increase in the supply price of raw milk, thus, raising concerns on a milk crisis.

 

The farmers demand that the price of raw milk rise 25% but the dairy companies suggest a maximum 11% hike. Farmers are planning to suspend supply for one day Wednesday (Aug 3) to protest the milk companies' stance.

 

The Korea Dairy & Beef Farmers Association (KDBFA), speaking for dairy farmers, said on Monday (Aug 1) that its members will refuse to supply 5,200 tonnes of raw milk on Wednesday as dairy companies will not accept their demands. The association added that it plans to halt the supply indefinitely if their negotiations with the milk companies make no progress by Friday (Aug 5).

 

The supply of raw milk has already been unstable with the sharp drop in the number of dairy cows due to the spread of mouth-and-foot disease early this year and the recent scorching heat wave.

 

The government culled nearly 150,000 head of cattle in order to curb the deadly animal disease during the winter months. Of them, 36,000 were dairy cows, prompting a 10-15% decrease in milk production.

 

Dairy farmers argue they are sitting atop a heap of debts as the raw milk price has been frozen for the past three years although the feed price has risen by 30% in the meantime. They say they are in the worst plight ever.

 

"The farmers are suffering difficulties coming from reduced milk production due to the aftermath of foot-and-mouth disease. The price of raw milk should be raised sufficiently," the association said.

 

The dairy companies maintain that a sharp increase in the raw milk price would lift the prices of dairy products at the market, which would cause lower consumption.

 

If the raw milk price goes up 10%, the prices of consumer dairy products should rise from 3-10%, effecting price hikes for bread, cakes and ice cream as well.

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