Milk production in Israel is carried out under a quota system, where the annual volume is divided into monthly quotas. Economic incentives have been set to encourage dairy farmers to level-up production throughout months, so that milk supply to the industry is more uniform throughout the year. Reduced price are paid for excess milk production in “winter” months (November – April), with Economic incentives for increased production in “summer” months.
The base price for the milk to the producer is agreed upon between government, farmers and dairy industries. The price reflects the average cost of production plus an agreed return for the farmers’ labor and invested capital.
Annual update of national quota (based on previous quota). 2017 quota 1,500 million liters.
The overall quota allotments reflect the expected consumption volume of the local market
Quotas can only be traded between milk farmers and under the auspices of the Israel Dairy Board