Milk Prices Expected to Rise Around Chuseok... Inflation to Increase Again

The prices of major ingredients frequently appearing on ordinary people's tables continue to rise, which is expected to increase the burden of preparing holiday meals for Chuseok, now just a month away. The photo shows citizens shopping at the Nonghyup Hanaro Mart Yangjae branch in Seocho-gu, Seoul, on the 17th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Seungjin Lee] The Dairy Promotion Board has ultimately raised the price of raw milk, and milk prices are expected to increase around the Chuseok holiday as early as next month. Prices of items using milk as a raw material, such as coffee and bread, are also expected to rise, increasing the burden on consumer prices.

According to the food industry on the 21st, the Dairy Promotion Board sent a ‘Milk Price Table’ to milk companies on the 17th, which includes raising the price of raw milk produced from the 1st of this month to 947 KRW per liter, an increase of 21 KRW.

Since related products made from raw milk, such as milk and ice cream, could see consecutive price hikes, the Ministry of Agriculture, Food and Rural Affairs requested a ‘6-month grace period,’ but the Dairy Promotion Board decided to raise prices. Milk companies paid the increased raw milk price to dairy farmers for the period from the 1st to the 15th of this month. Raw milk payments are settled every half month.

This raw milk price increase exceeds four times the increase made in 2018. When the raw milk price was raised by 4 KRW in 2018, Seoul Milk implemented a price increase of about 93 KRW. Given the large increase, product price hikes are expected to be even greater.

An industry insider said, "Usually, when raw milk prices rise, product price increases are decided within one to two months," adding, "Since the cost burden has increased, product price hikes are a foregone conclusion, and prices are expected to rise around the Chuseok holiday."

Ice cream companies such as Binggrae and Lotte Confectionery are also reportedly considering price increases.

This raw milk price hike is expected to particularly burden small-scale cafes and bakeries. Large franchise companies have already raised prices once earlier this year due to rising raw material costs, so they have some leeway to absorb the cost burden. However, the situation is different for small businesses run by small business owners.

A, who runs a small bakery in Dongdaemun-gu, Seoul, said, "Small neighborhood bakeries rely on price competitiveness, so even with the soaring egg prices, we did not raise product prices," adding, "But this time, I think we can no longer endure it and will have to raise prices, but I am worried whether customers will still come."

This content was produced with the assistance of AI translation services.