Japanese milk producers are in an increasingly difficult situation. They are suffering from rising production costs, partly due to higher prices for feed since Russia’s invasion of Ukraine. Production cuts for raw milk following oversupply in the past have also led to more and more dairy farmers leaving the industry.
According to the Ministry of Agriculture, the number of dairy producers nationwide fell 4.3% year-on-year to 13,300 as of 1 February 2022. In Hokkaido, which accounts for more than 50% of Japan’s raw milk production, there were 5,560 producers, down 2.8%. The nationwide number of dairy farms has declined by about 4 % annually over the past 20 years.
The government has taken support measures such as subsidising feed costs and has also decided to increase subsidies for producers of raw milk in 2023 by the second highest amount ever recorded.
The dairy industry points out that demand for domestically produced raw milk for products such as cheese will most likely increase, with imports accounting for over 30% of the Japanese dairy market. The industry relies on exports to East Asia, but will not be able to take advantage of market opportunities if it loses its raw material base. This would also be a lost opportunity for a turnaround in Japanese milk production.