Negotiations to determine the volumes of drinking milk and processed milk that dairy processors must purchase from farmers for the period from next year to 2028 begin today, June 30.
Dairy farmers and processors will hold a subcommittee meeting at the Korea Dairy Committee office at 2:00 p.m. today to begin discussions on adjusting raw milk purchase volumes by usage.
This negotiation follows the "differential pricing system by usage" introduced in 2023.
The adjusted volumes will take effect starting in January of next year.
The negotiations are expected to discuss plans to reduce the volume of raw milk for drinking purposes by between 14,000 tons (t) and 43,000 tons (t), and to convert the reduced amount into milk for processing.
In the 2024 negotiations, the drinking milk quota was reduced by 9,000 tons.
However, a gap in positions between the dairy industry and farmers is expected regarding the scale of the drinking milk quota reduction.
The dairy industry maintains that the current drinking milk purchase quota is set too high compared to the decline in milk consumption, leading to a persistent oversupply.
The industry estimates that while the current base quota for drinking milk is 1.941 million tons, demand is approximately 1.61 million tons, resulting in an oversupply of over 300,000 tons.
On the other hand, dairy farmers argue that they must be cautious about reducing drinking milk quotas to maintain production bases and ensure management stability.
There have also been claims that production costs exceeded the raw milk price for drinking purposes set by the Korea Dairy Committee last year, leading to what is called a "reverse margin structure."
(Photo: Yonhap News)