As negotiations for raw milk prices approach, the possibility of freezing milk prices is gaining traction. This is due to a decrease in production costs, which has reduced the pressure for price increases 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 decline was attributed to a drop in the price of dairy feed, which eased the burden of feed costs. Last year, the price of dairy feed fell from 629 won to 615 won per kilogram, a decrease of 2.2% (14 won).
Raw milk prices are determined through negotiations based on the previous year's production cost fluctuations, involving both the dairy industry and dairy farmers as part of the Dairy Promotion Association. Under the current raw milk price linkage system, negotiations can occur if the production cost fluctuation rate is more than ±4% compared to the previous year, with price adjustments made within a maximum range of 70% of the production cost changes.
This year, the fluctuation rate of production costs did not reach the ±4% threshold required for price negotiations, and the government's strong focus on price stability further increases the likelihood of freezing milk prices. However, with raw milk prices having been frozen for two consecutive years and the worsening management conditions for dairy farmers due to rising labor costs and exchange rates, there remains potential for price increases.
The Dairy Promotion Association may conduct separate negotiations based on the board's judgment, even if the previous year's production cost fluctuation does not meet the criteria, taking into account the supply and demand situation for raw milk and market conditions.
Meanwhile, the profitability of livestock farms varied by species last year. For beef cattle, the production cost per head increased by 0.8% (101,000 won) to 13,274,000 won. While feed costs remained stable, increases in labor and farming facility costs impacted profitability. Conversely, due to declining market prices, the net profit per head recorded a deficit of 1,015,000 won, widening the deficit by 46.9% (324,000 won) compared to the previous year.
For dairy cows, the cost of raising each head increased by 1.5% (143,000 won) to 9,684,000 won. Factors such as rising calf prices and facility maintenance costs contributed to this increase, although the production cost of raw milk slightly decreased due to stable feed costs.
Profitability improved for pigs and chickens. The net profit per head for fattening pigs rose to 54,000 won, an increase of 74.2% (23,000 won) from the previous year, driven by rising pork prices and stable feed costs.
For broilers, the net profit per head increased to 608 won, up 68.9% (248 won) from the previous year, while layer hens saw their net profit rise to 15,937 won per head, a 16.9% (2,299 won) increase due to rising egg prices.
* This article has been translated by AI.
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