Milk Production Has Increased By 40% As Prices Set For Fall

Following a huge decline in May, milk production in the market has increased by 40 percent, signaling relief to consumers who are at the moment grappling with the high cost of the commodity on the shelf.

According to Sector regulator, Kenya Dairy Board, the volumes have grown from 43 million liters in May to 60 million liters in November, marking one of the biggest jumps in a span of five months.

Margret Kibogy, managing director, said the increase in production has been occasioned by favorable weather and availability of grazing fields, especially in the North Rift where farmers have harvested their maize crop.

“We have seen a huge increase in production and the sector is heading towards recovery in terms of supplies to the processors,” said Ms. Kibogy.

She said the consumer prices would come down once stability in production is achieved. She added that the production in December is expected to remain below the level witnessed last year, which was 68 million liters.

Consumer prices of milk have shot to 55 shillings in the last one month for a 500ml packet of long-life milk from 50 shillings as processors decried low volumes from farmers.

“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 PS Harry Kimutai.

On August 31st, the producer price of milk rose by up to 42 shillings per liter from 33 shillings previously as farmers gain from the current shortage of the commodity.

This was the highest price that dairy farmers had earned since the beginning of the year, coming as a reprieve at a time when they were grappling with an increased cost of animal feeds.

Currently, processors have increased the producer price of raw milk by more than double since March, following a decline in supply in the last couple of months.

Brookside is paying 17 percent more for a liter of raw milk, which pushed the cost to above Sh40 for a liter of the commodity delivered at the firm in Ruiru. On the other hand, New KCC increased its price by nearly the same margin.

The move by Brookside Dairy was expected to benefit both dairy co-operatives groups and smallholder farmers contracted to the processor. The move came after disruptions in the value chain occasioned by the Covid-19 pandemic, which has depressed production.

John Gethi, Brookside’s director of milk procurement and manufacturing, said the new rates were a reaction to the prevailing market conditions in the value chain.