Japan’s four major domestic dairy companies have cut back on drinking milk and cream production to make more butter in a bid to tackle a national shortage ahead of the Christmas and New Year holiday period.

Megmilk Snow Brand Co., Meiji Co., Morinaga Milk Industry Co. and Yotsuba Milk Products Co. have responded to a plan issued by Japan's ministry of agriculture, forestry and fisheries the country's dairy sector to increase household butter production by 30% in the first half of December.

The initiative was prompted by emergency butter imports of 7,000 tonnes in March and a further 3,000 tonnes in September.

"Stocks for butter … will mark a 22.9% year-on-year decline to total 17,900 tonnes - equivalent to three months' market demand - by the end of fiscal 2014 [May 2015]," predicted the Japan Dairy Association.

"Fresh milk production for fiscal 2014 is predicted to drop 1.5% from the previous year to 7.354 million tonnes, as demand for domestically-produced milk is expected to stay flat, which means there would be a supply shortage."

The shortfalls are attributable to falling numbers of Japanese dairy farmers as they age, as well as a surge in the price of animal feed. Last summer's abnormally hot weather also affected raw milk production.

Although lowering tariffs for imported butter would take pressure from the food processing industry, observers are not expecting the Japanese government to take such a step, which would weaken its position in trade negotiations, such as for the Trans-Pacific Partnership (TPP).