Japan dairy: milk-glugging ministers cannot end the glut


Japanese Prime Minister Fumio Kishida has denied a plea, which is unusual for citizens. Extra cup Of milk. Government officials set out to bite the whites at a press conference to spread the message. Japan is overkill. However, the minister’s milk drinking cannot counter the deep-seated imbalance between supply and demand.

Japan is expected to waste an estimated 5,000 tonnes of milk in the current winter season. The surplus can be traced back to 2014, when a shortage of butter led to a shortage of rations and-fear of horror-Christmas cakes. Inevitably, the planner went too far by encouraging farmers to raise more cows.

This problem is exacerbated by the decline in the number of children, which is the main demographic of Japan’s dairy complex. According to official data, children under the age of 15 and newborns hit record lows in 2020. Pandemic-related closures mean that milk sales to schools fell by 90 percent earlier last year.

On the other hand, the population aged 65 and over has reached a record high. They mainly like nice tea. Also, agriculture has become a game for old people in Japan. Retirement from the physically demanding livestock business is pushing up the costs of the rest of the businesses.

Major Japanese dairy companies such as Meiji, Morinaga Milk Industry and Megmilk Snow Brand are also under pressure. The latter’s operating margin averaged less than 3% over the last decade. Still, it relied on boosts from non-dairy products such as chocolate and margarine.

Profit is further threatened by the outbreak of the coronavirus, which has hampered the production of perm oil, the main component of margarine, in Southeast Asia. Malaysian palm oil futures hit a record high last year, rising almost in half.

The share of the Megmilk Snow Brand has halved from its peak in 2016 and has been steadily declining over the past six years. The outlook is more sour than ever, and the industry can expect to continue that trend.

Surplus happy cows grazing Hokkaido’s lush pastures in the summer are now facing a gloomy end. It is to be incorporated into a bowl of ramen.

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