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Israel's powdered milk reserves are nearly empty, and ice cream lovers will feel it the worst. The drop in powdered milk inventories comes from a steep increase in milk demand in recent months, according to the head of the Israel Dairy Board, Shyke Drori.

Demand has grown even though dairy prices have gone up by 10 percent in the last six months, he said.

Tnuva's factory for milk powder is one of the first victims when a milk shortage occurs, and this has various food manufacturers worried; ice cream makers in particular.

Drori said the Dairy Board recently sent warning letters to dairy farmers who have not met their production quotas, threatening to reduce those quotas and transfer them to other producers.

The board has also asked the finance and agriculture ministries to remove customs duties on powdered milk imported from the U.S. to allow ice cream production to continue.

The board also wants to increase production quotas by some 40 million liters a year, 3.5 percent of total production, and allow 700 tons of kosher powdered milk imports, as well as reduced milk allocations for dairy-product exports.