Israel Working to Reduce Costs of Dairy Products

Jerusalem, 20 November, 2025 (TPS-IL) — The Ministry of Finance is working to streamline the dairy sector, which currently operates as a planned and inefficient market, resulting in a large price gap of about 50% on average between the milk and cheese sold in Israel and the same products in Europe.

A broad package of measures as part of the implementation of the dairy sector reform, aimed at ensuring the economic future of dairy farmers, strengthening local production capacity, and increasing competition in the dairy market for the benefit of the public.

The package includes a safety net for dairy farms, investments in upgrading and expanding dairy farms, a quota redemption program worth over a billion shekels, the cancellation of the production limit, and strengthening competitiveness in small and medium-sized dairies.

As part of the reform, a “protection price” will be maintained for efficient dairy farms – a permanent mechanism that ensures that efficient dairy farms that choose to be covered by the safety net will be able to receive long-term certainty in quantity and price. The new price will be a competitive price and will reflect the production costs of efficient dairy farms.

The Ministry of Finance is also exploring the possibility of promoting a dedicated investment program for small and medium-sized dairies to make them a competitive factor in the dairy industry. The move will reduce dependence on large dairies, improve competitiveness in the industry, and ultimately is expected to lead to a lower cost of living for consumers and improved supply capacity in emergency and routine situations.