The Hokuren Federation of Agricultural Cooperatives announced on Dec. 12 that it will raise the wholesale prices of raw milk for butter and cheese for the first time in two years in fiscal 2017. The raise will be within the range of 1-2 yen per kilogram compared to in fiscal 2016. It has already agreed with 15 major and midsize dairy makers on the new prices. It expects the wholesale price hike to motivate dairy farmers to ramp up output, but with the reform of raw milk distribution systems under discussion, it may try to prevent dairy farmers from quitting milk production.
Every year, regional, “designated” producer organizations, which include Hokuren, negotiate prices of raw milk with dairy makers. Of butter and fresh cream distributed nationwide, 90% are made from milk produced in Hokkaido. This makes Hokuren’s wholesale price a benchmark for dairy products.
The new price will become applicable to raw milk that will be traded from April 2017. Raw milk used in soft cheese, such as cream cheese and camembert, will be traded at 68 yen per kilogram, which is up 2 yen from a year earlier and the largest increase of all. The price of raw milk for hard cheese, such as Cheddar and Gouda, goes up one yen to 69 yen per kilogram. Raw milk for butter and skimmed milk powder will be traded at 75.46 yen, up one yen from the previous year. Meanwhile, the price of raw milk for drinking milk and fresh cream will remain unchanged. (Abridged)