South Korea's Dairy Industry: An In-depth Analysis

South Korea's dairy industry has experienced substantial growth and transformation, driven by strong consumer preferences and increasing demand for dairy products nationwide. A notable trend is the expansion of the Ultra-High Temperature (UHT) milk category, which is growing at a compound annual growth rate (CAGR) of 7.3%.

Dairy Cattle and Farms

South Korea is home to approximately 417,000 heads of dairy cattle, underscoring the country's commitment to enhancing its domestic dairy production capabilities. Notable dairy farms include:

• Seoul Dairy Cooperative Farm: Recognized for its high standards and innovative practices.
• Lotte Samkang Dairy Farm: Known for its advanced dairy farming techniques.

Milk Production and Processing

Each year, South Korea produces about 2.1 million metric tons of milk, with around 1.9 million metric tons processed into various dairy products. Key production volumes include:

• Cheese: 30,000 metric tons per year.
• Milk Powder and Whey: 80,000 metric tons per year.

Key Dairy Enterprises

Several key enterprises play a pivotal role in the South Korean dairy market:

• Namyang Dairy Products Co., Ltd.: A leading entity in the production and processing of diverse dairy products.
• Maeil Dairies Co., Ltd.: Known for its wide range of dairy products such as cheese and yogurt.
• Seoul Milk Cooperative: The largest dairy cooperative in South Korea, playing a crucial role in stabilizing milk prices.

Export and Import Dynamics

South Korea exports about 10,000 metric tons of dairy products annually, mainly targeting markets like China, Japan, and Southeast Asia. Conversely, the country imports approximately 150,000 metric tons of dairy products, primarily from major exporters like the United States, Australia, and New Zealand.

Recent Industry Events

• A significant agreement between dairy farmers and businesses aims to maintain current raw milk prices while reducing prices for processed goods, seeking to mitigate inflation and enhance affordability.
• Namyang Dairy Products is undergoing substantial changes under new management after past controversies, including the arrest of former chairman Hong Won-sik for breach of trust and false advertising.
• Cheese exports have risen by 36%, showcasing significant growth in South Korea’s dairy industry prowess.
• The demand for diverse dairy products has led to a surge in cheese imports into South Korea.
• Following the foot-and-mouth disease outbreak in Germany, South Korea has restricted imports of German meat to safeguard its domestic industry.
• Fonterra’s mozzarella cheese product is gaining popularity, with South Korean retailers seeing increased demand through hypermarket chains.
• The dairy industry is closely monitoring developments in China, South Korea, and Japan amid rising trade complexities.
• Trading on South Korea’s Kospi index was temporarily halted amidst fluctuating economic conditions.
• The U.S. has imposed a 25% tariff on South Korea, affecting trade dynamics.
• Globally, nations such as South Korea, Japan, and Italy are encountering similar fertility challenges.

Modified: 2025/05/05

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