Milk Prices Spike As Shortage Continues To Bite

The prices of milk have been fluctuating since March following a supply shortage that has forced processors to adjust their prices in response to the tightening supply in the market.

“This is obviously in response to the shortage in supply of milk and high cost of producer price, which has been going up of late,” said Livestock Principal secretary Harry Kimutai.

In the latest review, a half-liter packet of the popular Gold Crown New KCC brand has gone up to retail at 52 shillings from 50 shillings previously with the same quantity for Brookside selling at 55 shillings.

The high cost is attributable to a sharp decline in supply, leading to a spark in producer prices with then additional cost passed to consumers, leading to rising in inflation.

Brookside is paying 17 percent more for a liter of raw milk, which pushed the cost to over 40 shillings for a chilled commodity delivered at the firm in Ruiru. New KCC also increased its price by nearly the same margin.

Data from industry regulator the Kenya Dairy Board indicates there has been a drop of up to 36 percent in milk deliveries from framers between the months of March and June this year.

According to KDB, milk production was at 63 million liters per month in January, but it has since dropped to 42 million liters per month.

“Farmers should also take advantage of this price incentive to improve the management of their dairy herds, including vaccinating the animals against the deadly Foot and Mouth Disease and Lumpy Skin Disease, among others,” John Gethi, Brookside’s director of milk procurement and manufacturing said.

Earlier reports also indicated that the government of Kenya could be forced to import processed milk products following a monthly drop in the supply from 63.4 million liters in January to 40.2 million liters in June 2020.

Agriculture CS Peter Munya attributed the reduction to the COVID-19 pandemic which has disrupted the market, foot, and mouth disease being experienced in some counties, and the cold weather season.

According to CS Peter Munya, livestock, fisheries, and cooperatives blamed the shortages of raw milk sold to processors by farmers on a drastic drop in farm production and sale of raw milk in the informal sector.

READ: Kenya Likely To Import Milk As Demand Beats Supply