South Korean production dips
South Korea’s domestic milk production is forecast to return to 2.03 million tons after spiking to 2.1 million tons in 2020, according to a report released by the US Department of Agriculture’s Foreign Agricultural Service. Milk production in 2020 benefited from favourable weather and higher price expectations, but production is expected to generally decrease in coming years as the government tries to manage supply and decrease powdered milk stocks.
At the same time, Covid-19 related school closures resulted in weaker fluid milk demand. The resulting imbalance resulted in higher dried milk production and large dried milk stocks.
Consumers enjoyed more milk-based beverages through the foodservice channels and consumed more flavoured milk, while consumption of fresh milk declined. However, consumption of low-fat milk, organic milk and fortified milk grew in the country. Hypermarkets and supermarkets continue to be a major distribution channels for fresh milk in multipacks.
Meanwhile, the cheese market continues to grow. Per capita cheese consumption has more than doubled in only ten years. Within the cheese market, processed cheese is showing fast growth. Consumption of cheese continues to increase in both the consumer market and food processing industry. Cheese is a popular snack for both children and adults.
Dried milk stocks reached 11,537 tons in June 2020 despite government efforts to reduce stocks, up 24.1% from June 2019. Dairy product manufacturers, facing weak fluid milk and infant formula demand due to the low fertility rate, are working to diversify their business portfolios. Processors are looking to target the adult and senior powdered milk market.