Raw Milk Volume Talks Open June 30 as Korea Weighs 43,000-Ton Drinking Milk Cut

Korea’s raw milk volume talks opened on June 30, setting the stage for a reshaping of the dairy supply structure for 2027 through 2028. The negotiations determine how much raw milk dairy processors must purchase from farmers for drinking milk and for processing use. The main issue is whether drinking milk volume should be cut by up to 43,000 tons to reflect weaker demand for white milk.

Drinking milk cut becomes the main issue

Drinking milk refers to raw milk used mainly for fluid milk products, while processing milk is used for cheese, butter, powdered milk and other dairy goods. Korea manages these volumes to preserve production capacity and stabilize prices. Demand for white milk has softened as school milk programs shrink, the child population declines and alternative beverages expand. Processors want lower drinking milk allocations to reduce inventory and cost pressure. Farmers are expected to push for gradual adjustment because volume cuts can translate directly into lower income.

2027-2028 purchase rules under discussion

The talks will set mandatory purchase volumes from next year through 2028. The negotiating range includes a reduction of up to 43,000 tons in drinking milk. If confirmed, part of that volume may shift to processing use or lead to a broader reshuffling of purchase structures. The scale is meaningful for production planning and raw material allocation across Korea’s dairy industry. The won exchange rate also matters because imported cheese, butter and milk powder compete with domestic processing milk. If the won weakens, imported inputs become more expensive and domestic processing milk may gain importance.

Impact on consumers and farms

The outcome may influence retail milk prices. A lower drinking milk volume could ease oversupply pressure in white milk, but farms still face fixed production costs. Feed, power and labor costs remain high, so a sharp purchase cut would increase pressure on farm management. If adjustment is delayed, processors could face larger inventories and promotion costs, which would also weigh on price stability. The market is watching the final reduction size, the timing of implementation and whether more volume will be redirected to processing use.