Processor cuts raw milk and retail prices on over-supply

[Photo: Courtesy]

Farmers are the biggest losers in the wake of a tumble in shelf prices following increased production in the last quarter of 2017.

Major processors in the country including industry leader Brookside Dairy have reduced the prices for raw milk paid to farmers by Sh2.

The drop has been a boon for consumers, with the Ruiru-based milk processor slashing the prices of all its brands by Sh10 per litre.

“The milk value chain is responding to the usual market forces of demand and supply. The current situation shall remain for as long as the prevailing market dynamics remain in force,” said Brookside Dairy Milk Procurement Director John Gethi during a visit to the firm's raw milk collection facilities in Nyeri County yesterday.

Brookside has 160,000 farmers supplying milk. The farmers are grouped in 300 diaries across the country where the company collects the milk from.

Reliable market

Mr Gethi said Brookside had renewed the raw milk supply contracts of all 160,000 farmers. The company, which procures 1.5 million litres of milk from farmers each day, said it pioneered the use of milk supply contracts to guarantee farmers a reliable market for their milk throughout the year.

Milk production in Kenya is largely weather-dependent, with seasonal fluctuations witnessed during the year. Supply increases during the rains while production often plummets in dry seasons.