South Korean dairy farmers and processors agreed to reallocate 26,000 tons of raw milk from drinking-milk production to processed products such as cheese and powdered milk over two years starting in 2027. Drinking-milk allocations will fall to 1.915 million tons from 1.941 million tons, while processing allocations will rise to 135,000 tons from 109,000 tons, leaving the combined total unchanged. The agreement followed nearly three months of negotiations and 11 rounds of talks by a seven-member subcommittee before approval by the Korea Dairy Committee board. It is intended to reduce processors’ surplus-milk and inventory burden as consumption declines. Industry estimates actual demand at about 1.61 million tons, more than 300,000 tons below the drinking-milk benchmark each year. Processors say domestic raw milk costs more than twice as much as imported milk, making it difficult to sell surplus milk powder profitably. The base price of raw milk was not negotiated this year because cumulative production-cost changes had not reached the 4% threshold required to trigger price talks.