Milk crisis looms amid stalled price talks

Dairy farmers halted the raw milk supply again on Wednesday, with price talks stalled without agreement.

Industry sources predicted that a milk crisis is imminent, saying that current milk reserves would reach their limits within one or two days.

Representatives of the government, milk manufacturers and diary farmers continued marathon negotiations on the price increase of raw milk on Wednesday.

The price differences seemed to be narrowing as farmers demanded a 160 won increase per liter, down from their previous 174 won demand, while milk manufacturers suggested 120 won.

However, they could not reach an agreement and rejected a government proposal of a 130 won increase.

With the talks stalled, farms nationwide again started to halt supply of raw milk. Some farmers blocked trucks of milk products from entering their regions from Tuesday night.

Milk manufacturers usually hold one day’s-worth of raw milk reserves. When farmers first stopped collecting raw milk for one day on Aug. 3, manufacturers and retailers survived the situation with these reserves.

“A one-day suspension would not have a huge impact on consumers. But if the situation is prolonged for more than one day, a milk crisis seems unavoidable,” said a local dairy company official.

Industry sources also added that even if the talks reach a consensus, decrease in milk products would undoubtedly follow, putting more pressure on consumers.

By Lee Ji-yoon (jylee@heraldcorp.com)