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          Talks on milk price hikes fail in S Korea

          Updated: 2011-08-12 17:00

          (Xinhua)

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          SEOUL- Talks on raw milk price hikes between South Korean livestock farmers and milk companies ended up failure on Friday, but farmers decided to start offering raw milk, avoiding the much-concerned supply shortage.

          Talks on milk price hikes fail in S Korea
          The Korea Dairy and Beef Farmers Association (KDBFA), speaking for livestock farmers, said three days of talks failed to narrow the differences between farmers and dairy firms, confirming its demand was not accepted by milk companies.

          Dairy farmers initially claimed that the price of raw milk should rise by 173 won ($0.16) per liter to 877 won, but said it could accept an increase of 145 won. Farmers have argued that they were saddled with debts as supply prices of raw milk have been frozen for the past three years despite a 30 percent jump in feed costs since 2008.

          In contrast, milk companies said they could raise their purchase price by a maximum of 130 won, up from their original demand for an 81 won increase. Dairy firms have insisted that a sharp increase in raw milk prices would lift overall prices of dairy products, which would trigger weaker consumption.

          Meanwhile, the KDBFA decided to start offering raw milk, ending their three-day halt of milk shipments. Dairy farmers suspended supply of raw milk from early Wednesday amid stalled negotiations on milk costs. Last Wednesday, livestock farmers halted milk supply for one day, boosting fears over a so-called milk crisis.

          The confrontation came after the supply of raw milk has been unstable since the outbreak of the foot-and-mouth disease outbreak that began last November. Around 36,000 heads of milk cow were culled to curb the spread of the highly contagious animal disease.

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