A 2.8% discount per liter of milk for dairies

Posted on Jul 1, 2024 by Ifi Reporter - Dan Bielski

A 2.8% discount per liter of milk for dairies - most likely will not be passed on to consumers in the near future: the Dairy Council announced that the target price of milk, which is the price of raw milk that dairies pay at the barn gate, will decrease by 6.95 ag from tomorrow from 244.16 ag to 237.21 ag '.
Apparently, this is good news for consumers because in the previous quarter (April) the price of raw milk rose by 2.17% and the state hastened to immediately raise the prices of the milk products under supervision by about 4.5%. What will happen this time when raw milk is discounted? no nothing "The mechanism is different," the Ministry of Agriculture tells us.
In March the price of raw milk was 238.96 AJ, in April it became more expensive to 244.16 AJ and is now discounted to 237.21 AJ (among other things due to a reduction in the cost of feed for cows and the over-accounting that was in the previous quarter with the dairy farmers which resulted in them receiving too high a retroactive refund on a debt that the state owe them). That is, the price of raw milk is still lower than its price before the recent price increase, so why not lower prices?
Supervised dairy products are among the few in the supermarket that are sometimes discounted for the consumer, with most products being on a constant upward trend. Why won't it happen this time too?
According to the Ministry of Agriculture, the price calculations monitored according to the inspection order are examined according to fixed formulas every six months to a year, within an automatic mechanism that does not require the signature of ministers and takes into account the changes that have occurred in the main inputs in the production of the products taking into account the change in the input and price indices. The previous update took effect as mentioned on April 1 and came into effect in May. By law, you have to wait from this date - six months to a year for the next update.
The ministry informed Ynet that "the target price is only one component out of all the components included in the formula that determines the rate of change in the prices of the regulated products. The update mechanism includes a retroactive component to the target price of raw milk, therefore a change in the target price will be retroactively passed on to the consumer." I mean, the office hints that there is something to wait for, but it won't happen right now.


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