As negotiations for raw milk prices approach, the likelihood of a price freeze is increasing. This is due to a decrease in production costs, which has reduced the pressure for price hikes compared to previous years.
According to the National Data Agency's "2025 Livestock Production Cost Survey Results" released on May 15, the production cost of milk last year was 1,014 won per liter, a decrease of 0.4% (4 won) from the previous year. This reduction is attributed to a decline in the cost of dairy feed, which fell from 629 won to 615 won per kilogram, a drop of 2.2% (-14 won).
Raw milk prices are determined through negotiations between the Dairy Promotion Association, which includes both the dairy industry and dairy farmers, based on the previous year's production cost fluctuations. Under the current raw milk price linkage system, negotiations can occur if the production cost fluctuation exceeds ±4% from the previous year, with price adjustments made within a maximum range of 70% of the cost change.
This year, the fluctuation in production costs did not reach the ±4% threshold, and the government's strong focus on price stability further increases the likelihood of a price freeze. However, since raw milk prices have been frozen for two consecutive years, and due to rising labor costs and exchange rates, there remains a possibility for price increases.
The Dairy Promotion Association may still conduct separate negotiations based on the supply and demand situation for raw milk and market conditions, even if the previous year's production cost fluctuation does not meet the criteria.
Meanwhile, the profitability of livestock farms varied by type last year.
For beef cattle, the net loss per animal was 999,000 won, a reduction of 615,000 won (38.1%) from the previous year, indicating some improvement in losses. However, this marks the fourth consecutive year of deficits since 2022. While rising beef prices have somewhat restored profitability, the increase in calf prices has continued to burden production costs. In fact, the production cost for beef cattle rose to 1,289,000 won, an increase of 13,000 won (1.0%) from the previous year.
For other cattle, the net loss was 1,493,000 won, down 315,000 won (17.4%) from the previous year. This reduction is attributed to lower feed costs and higher market prices.
In contrast, the profitability of dairy cows and pigs and chickens improved. Dairy cows saw a net profit of 2,235,000 won per animal, an increase of 85,000 won (3.9%) from the previous year, driven by higher raw milk selling prices and calf prices.
Finishing pig farmers reported a net profit of 81,000 won per animal, a significant increase of 50,000 won (157.6%) from the previous year due to rising pork prices.
Layer hens experienced a net profit of 12,561 won per animal, up 4,519 won (56.2%) due to rising egg prices, while broiler chickens saw a net profit of 213 won per animal, an increase of 85 won (66.0%) due to lower rearing costs.
* This article has been translated by AI.
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