Israel faces imminent milk shortage as dairy farmers halt production

2026-02-02 - 13:49

The leadership of dairy farmers decided Sunday to reduce milk production in Israel as part of the battle over the Treasury's milk reform. Monday morning, it was decided to take the step starting on Tuesday. Israel Hayom learned that on Monday morning, the dairy farmers' leadership is expected to decide on halting milk supply starting Tuesday. The implication is that within a few days, a milk shortage will be felt on supermarket shelves. About a week ago, the Israel Dairy Board petitioned the High Court of Justice (Israel's Supreme Court) against Finance Minister Bezalel Smotrich's order to expand the scope of cheese imports, which he signed on January 19, 2026. In the petition against the order, they claimed that the Finance Minister's signature seeks to dramatically and unprecedentedly increase the import quota for cheese with tariff exemptions. "The decision constitutes a blatant violation of a sectoral agreement signed between the state and the petitioner and other parties, and is also contrary to the provisions and fundamental principles set forth in the Milk Economy Planning Law," it was stated. Israeli demonstrators spill milk during a protest against the Treasury's new milk reform (Photo: JINI/Ayal Margolin) Meanwhile, Israel Hayom learned that a dairy farm that sells its milk quotas to the state will receive compensation of 2 to 3 million shekels (approximately $550,000 to $850,000), depending on its size. Dairy farmers will be able to choose from several options: continue operating the dairy farm without quota protection, meaning they will build a business model on their own without state involvement, or stand on their own. Another option is to sell the dairy farm's contents (cows, facilities, etc.) to the state and, in addition, receive a range of benefits for converting the land to other uses: a solar field, a guesthouse complex, etc. Naturally, the reform faces fierce opposition from dairy farmers, who note that operating a dairy farm requires certainty, as these animals require planning for veterinary care, food, kosher certification, and so on. To meet this and respond to the rapid pace of milk consumption among Israeli consumers, considered among the highest in the world, the dairy farm needs certainty. Hence, the need for planning the milk economy arose. Beyond the issue of the dairy farm's ability to meet demands and of course also to plan its path at least a year ahead, dairy farmers are dealing with price reductions, which theoretically means the weight shifts from the dairy farms to the dairies, and these as strong players in the field can push prices downward or leave the dairy farmer with his milk without demand.