Why are dairy products so expensive, and is there a shortage?


Lior Simcha, CEO of the Milk Producers Association, stated that he hopes that the price of dairy products will drop soon, in a conversation with Anat Davidov on radio station 103FM.

Milk prices, which are under government supervision, rose by 1% recently, on May 31, one day after Simcha spoke with Davidov, yet he hopes that the gap between production and market will soon close.

The additional spot shortage of dairy products is really due to technical faults and is not something deliberate, he explained. The more certainty there is, he assumes that the dairies will invest in more production lines, and little by little prices will balance out.

Simcha doesn’t think the shortage is related to the increase in the price of government-supervised dairy products, believing rather that it is just temporary.

Last week, work stopped on Thursday afternoon for Shavuot, then Friday was the holiday followed by Shabbat so there were fewer working days last week. 

Israeli Finance Minister Bezalel Smotrich is seen pointing downwards at a Religious Zionist Party faction meeting in Jerusalem, on May 1, 2023. (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

It’s not related to rising prices, but the opposite, he explained. When dairies have more incentives to invest, they’ll produce more dairy products and the shortages of the last few years will cease.

He continued to say on the same subject: “This is about the price on the shelf – there’s a gap between that price and the producers’ price.”

“This is about the price on the shelf – there’s a gap between that price and the producers’ price”

Lior Simcha, CEO of the Milk Producers Association

Simcha: Liberman knew to balance farmers, industry and consumers’ needs

According to previous agreements made with former finance minister Avigdor Liberman, there was supposed to be an increase of 16%. Simcha credits Liberman for knowing how to balance the needs of farmers, industry and consumers.

All increases are implemented reluctantly, and it should be mentioned that the producers haven’t yet adhered to the general index. Liberman made an agreement, and there’s another percentage gap that still needs to be covered. 

Simcha very much hopes that prices will decrease even though there’s an increase in the prices of goods worldwide. The target prices are a derivative of prices in Europe and he hopes they will come down soon, but isn’t sure what will happen in the coming year.