Israel’s dairy companies, Tnuva, Strauss and Tara Dairy, are preparing to raise prices after Sukkos, because of the price in the target price of raw milk.
Last week, the Ministry of Agriculture published a recommendation to raise the target price of milk by 9.4% to NIS 2.34 per liter, including a fee of NIS 0.047 per liter. As a consequence, the joint Ministry of Agriculture and Ministry of Finance committee will announce a price hike for price-controlled dairy products within two week, including milk, Emek and Gilboa yellow cheese, butter, and sour cream.
The price hike for price-controlled dairy products is expected to be less, because compared with the target price of milk in the last price hike for these products (in the second quarter of 2011), the current rise is 6.7%, from NIS 2.19 per liter (including the fee) to NIS 2.34 per liter.
A top Ministry of Agriculture official told “Globes”, “The current target price is almost the same as the price in April 2008. In 2009, prices for price-controlled products fell by 5%, there was no change in 2010, and prices again rose in 2011. All in all, prices for price-controlled dairy products have barely changed in the past four years. Compared with prices for housing and fuel, prices for price-controlled dairy products have risen the least.”
As for the sharp rise in prices for dairy products that are not price controlled, the official said, “Until the change in ownership of Tnuva, prices for dairy products rose in line with the rise in prices for price-controlled dairy products. The breakout in prices was in 2008-11.”
In 2008, Apax Partners took control of Tnuva.
Dairy companies are waiting for the rise in the target price of milk to raise their prices across the board. The three companies today signaled that they plan to raise prices shortly, but declined to say whether they will introduce a general rise in prices.
Tnuva said, “In view of the sharp rise in the price of raw milk, prices for for price-controlled dairy products are expected to rise.”
Strauss said, “We’re studying the decisions and reviewing the implications of the rise in the target price, as well as the rise in prices of other inputs and commodities.”
Tara Dairy said, “The rise in the price of raw milk will force Tara to update prices of its products accordingly.”
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