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Japans 1st Milk Prices Hike in 30 Years

12 December 2007

JAPAN - Meiji Dairies Corp. and Morinaga Milk Industry Co. decided on Monday to raise milk prices next spring for the first time since 1978, citing higher raw milk prices as the price for cattle feed shoots up amid increased demand for biofuel.

Domestic raw milk prices are set through annual negotiations between milk companies and 10 producer groups across Japan. The largest group for beverage-use milk settled on a price hike of about 3 per cent for deliveries starting in April to Meiji Dairies, the largest milk company, and No. 2 firm Morinaga Milk.

Because these prices act as benchmarks for negotiations with other parties, the price of beverage-use raw milk will likely rise nationwide.

Because milk is made from 100 per cent raw milk, the cost-sales ratio is high and there is little room for higher costs to be absorbed. Compounded with higher costs for energy and materials for paper packing, milk companies see no choice but to raise wholesale and suggested retail prices.

TheCattleSite News Desk



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