Major dairy companies are considering raising retail milk prices from as early as October, industry sources said Wednesday.
The companies, including Morinaga Milk Industry Co. and Meiji Co., largely agreed with a dairy farmers' cooperative covering the Kanto region on an increase of ¥5 per kilogram of raw milk from October. The companies will consider passing on the rise in purchase costs to their product prices, the sources said.
The price hike, the first since March 2009, is driven by steep increases in livestock feed prices in the face of a weakened yen, among other factors.
Morinaga said it is considering a price rise as it is unable to absorb the expected increase in cost on its own.
According to the Ministry of Agriculture, Forestry and Fisheries and dairy farming associations, contract prices of mixed feed for the July-September quarter reached a historic high of around ¥68,000 per ton, putting a heavy burden on dairy farmers.
Dairy farming associations had been in negotiations with dairy firms since January, but were yet to agree on a new raw milk price due to the volatile feed prices.