“IDF Radio" (Galei Zahal) reports that prices for dairy products are expected to rise by 10% after the holidays, because of a NIS 0.17-0.20 per liter rise expected in the target price of milk. It said that the target price of milk, which guarantees the price of milk produced by dairy farmers, has not risen since the cottage cheese protest and the establishment of the Kedmi committee, which set the target price at NSI 2.14 per liter. Industry sources now believe that the target price will be raised.
Rising global prices for commodities have resulted in dairy farmers making lower profits than they are guaranteed. The farmers therefore argue that there is no choice but to raise the price. "The target price should be raised because of the rise in prices for cereals, and I say this with regret," said a dairy farmer. "We won't make larger profits. We basically trod water during the last quarter. We lost money, and if the target price is not updated, it will destroy the industry."
A Ministry of Finance source said today that the Ministry of Agriculture and the Dairy Board have not yet asked for a price hike, but that the ministry expects a request, and when it is made, the ministry will consider it. "A price hike of almost 10% seems to be too much," said the Ministry of Finance official, adding that Minister of Finance Yuval Steinitz has also instructed a review for the possible reduction of quotas for milk producers in order to increase competition.
The Ministry of Agriculture said in response, "The consumer price partly depends on the target price. The price committee will consider an update of the target price after the Sukkot holiday on the basis of the prices of inputs."
Published by Globes [online], Israel business news - www.globes-online.com - on September 24, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012