Last Month's Milk Price Inflation Hits Highest Level in 14 Years Since Financial Crisis

14.3% Increase Compared to Same Period Last Year
Fermented Milk Growth Rate Highest in 18 Years and 5 Months
Increase Extends to Ice Cream and Powdered Milk
Milkflation Concerns Materialize

As raw milk prices rise, the phenomenon of 'milkflation (milk + inflation)'?where prices of related products increase consecutively?is becoming a reality. This is due to the consumer price index for milk recording the highest growth rate since the global financial crisis, followed by steep price increases in related products such as fermented milk, ice cream, and powdered milk.

A customer is selecting milk at Hanaro Mart in Yangjae-dong, Seoul. Photo by Younghan Heo younghan@

According to the National Statistical Portal of Statistics Korea on the 5th, the consumer price index for milk last month was 122.03, up 14.3% compared to the same month last year. This is the highest rate in 14 years and 2 months since August 2009 (20.8%), right after the global financial crisis. The price increase rate for fermented milk was 14.7%, the highest in 18 years and 5 months since May 2005 (14.7%). Ice cream prices rose by 15.2%, marking the highest increase in 14 years and 6 months since April 2009 (26.3%). Powdered milk, which uses milk as a raw material, also saw an expanded increase of 10.6%.

Recently, the Korea Consumer Agency targeted the ice cream industry, stating, "We can only speculate that ice cream companies exploited the fact that consumers cannot access specific product information such as raw material content or prices, thereby deceiving consumers and intensifying their burden," and demanded price reductions.

However, bread products using milk as a raw material saw a slowdown in price increase to 5.5%. This is interpreted as a result of related companies collectively lowering bread prices in July ahead of the raw milk price hike. Earlier, SPC sequentially reduced prices of 30 items, including bread and cream bread, by an average of 5% starting in July. Paris Baguette, operated by SPC, also lowered prices of 10 products such as bread and baguettes by 100 to 200 won. Tous Les Jours, operated by CJ Foodville, similarly reduced prices of 15 products, including red bean bread and cream bread, by an average of 5.2% starting in July.

The price increase rate for ramen also showed a slowing trend, dropping from 13.4% in June to 10.0% in July, 10.7% in August, and 7.5% in September, before turning negative last month. Additionally, the price increase rate for snacks continued to slow from 10.5% in June to 8.1% in July, 7.7% in August, and 6.4% in September, also recording a negative rate last month. The price increase rate for pies also slowed from 11.1% in June to 4.1% last month.

Previously, ramen and confectionery were among the items that implemented price reductions under pressure from the government and consumer groups. Nongshim lowered the ex-factory prices of Shin Ramyun and Shrimp Crackers by 4.5% and 6.9%, respectively, in July. Likewise, ramen companies such as Ottogi, Samyang Foods, and Paldo collectively reduced product prices, and Lotte Wellfood (formerly Lotte Confectionery) and Haitai Confectionery also lowered prices of snacks and biscuits.