Milk prices crash farmers’ hopes

"With the price of milk dropping from Sh38 to Sh18 in less than one year, it is difficult to sustain his dairy cows and cater to the family "Francis Karara?. 

A farmer in Kirinyaga County has cut his stock of dairy cows worth an estimated Sh13 million, down to Sh7 million to reduce the high cost of maintaining the herd. This comes at the time when the cost of milk sold to processors has reduced to an average of Sh21 per litre, which is below the production cost.

Nyaga Muriuki, the farmer from Gatugura in Gichugu constituency, in Kirinyaga said the production costs, especially price of livestock feed has continued to go up, yet milk prices only rise to a certain level before dropping. He termed the current slump as unprecedented.

“I had 131 cows, which I reduced to 110, and I am further reducing them to about 70, which I can manage,” Muriuki told MT. KENYA STAR.

“I can tell you right now prices are very bad. I used to sell my milk at Sh42, now it has gone down to Sh20,” he said.

“I am not making any pro­fit and I am now forced to use some money from other businesses that I ran to support these animals, which is uneconomical and not right,” Muriuki said.

Muriuki is part of the growing number of farmers, who have been cutting down their dairy herd, threatening to reverse the gains made in milk production, in a country, where consumption of the same is at a deficit.

The Economic Survey for 2019 indicates that the quantities of milk delivered to the dairy processors increased by 18.4 per cent from 535.7 million litres in 2017 to 634.3 million litres in 2018. On the whole, the dairy sector pumps about 30 billion into the economy every year.

Farmers like Muriuki now see a bleak feature in an industry that had become one of the best revenue generators at the household level, considering that what is sold to processors is paid monthly while what is sold in the retail market is paid on a daily basis, providing cash to finance other agriculture and household needs.

“The government needs to come up with a plan that makes sure the prices are certain to save the sector from total collapse,” he said.

Other measures Muriuki says can save the farmers from the predicament include exemption of tax for animal feeds manufactures which will make the feed cheaper and affordable to the farmers.

He says a farmer locally spends about 60 per cent more money in milk production as compared to a farmer in Uganda.

“The cost of producing one litre of milk ranges from Sh20 to 25 as compared to Sh10 in the neighbouring countries. Uganda also has cheaper and adequate animal feeds ingredients including maize, wheat, sunflower and cotton seeds used in the manufacture of the animal’s feeds,” Muriuki said.

Nehemiah Nyaga, a dairy farmer in Kithunguru area of Embu has also cut down on his investment. Despite a costly investment in high yielding Holstein Friesian herds, he has given up on plans to reach 100 litres of milk per day because the cost of production is high yet the prices are low.

The full-time farmer delivers his milk to Mburungo Dairies which in turn sell to Brookside and New KCC.

He says the society is buying at Sh27.50 per litre, the amount he notes cannot enable a farmer to meet his daily needs and pay school fees for the children.

“This is a very poor pay that barely covers the production expenses. I have no other job other than dairy farming. I feel like quitting but I have no other alternative. As farmers we are just surviving as the cost of commercial feeds and labour is very high,” he said.

“The returns on the milk are so low that it cannot properly pay school fees for our children. Our only reprieve is when we get direct consumers who offer us Sh50 per litre. However, we are fearful that the government may stop direct selling of unprocessed milk.”

Other dairy farmers now want governors to work with local cooperative societies to build milk processing factories to caution them for the national processors like Murang’a County has done.

Francis Karara, a dairy farmer from Ol Kalou has been selling his milk to Ol Kalou Dairies Ltd.

The dairy sells the milk collected from Ol Kalou farmers to Brookside dairies, New KCC and Daima for processing.

Dairy farmer Francis Karara with some of his dairy cows at Mwireri, Ol Kalou in Nyandarua. He wants the county to start a milk processing plant.

Karara says dairy farming has not only been good but also a very promising venture, as the dairy has been offering farmers as much as Sh38 per litre of milk.

With the price of milk dropping from Sh38 to Sh18 in less than one year, he says it is difficult to sustain his dairy cows and cater for his family.

“All our hopes and our plans to raise well and educate our children were pegged in dairy farming. But it is fast collapsing, just like coffee and tea industries. It appears the cartels which destroyed tea and coffee industries have now turned their guns’ on the dairy industry, “he says.

Karara says Nyandarua Governor Francis Kimemia has the power to change things. He says that in Murang’a Governor Mwangi wa Iria has ensured the milk prices don’t drop below Sh35.

“Wa Iria even gives cows and fodder to his people. We don’t want Kimemia to give us, we have enough, all we want is that he builds for us a milk processor so we add value to our products for better marketability,” he says.

Dickson Munene, a dairy farmer from Maragua says he sells his milk to Murang’a County government at the price of Sh35 per litre.

The price has remained constant since farmers in the county entered a deal with a private milk processing company to buy their milk at a constant price in 2014.

Since then, local farmers have remained unaffected by the changes in the market and have a guaranteed market for their produce.

The county has established a multi-million processing plant that was completed early this year and is being run by Murang’a County Creameries (MCC), an umbrella Sacco of 36 dairy co-operatives.

Munene said selling milk to MCC was a wise choice as a section of farmers chose to sell their milk to private companies.

“I am now able to budget for the proceeds I get from my milk farming and plough it into other projects,” Munene said.

Emilio Gathuru, a dairy farmer in Subukia, Nakuru County says low prices have forced him to withdraw some of the meal supplements to the cows to cut production and so that he can minimize losses.

“The cost of producing one litre is more than 20 shillings and considering the current high prices of dairy feeds, we are making huge loses.”

“Things have become very tough since we depend on dairy farming in sustaining our living, and we are forced to find other alternative sources of income.” He said, adding that if the situation is not addressed accordingly, the dairy farming might collapse, just like pyrethrum did.