Dairy farmers will have to wait a little longer for improved earnings from milk sales beyond the government’s recommended retail price of Ksh 50 per litre.
Agriculture and Livestock Development Cabinet Secretary Dr. Andrew Karanja says the government is going back to the drawing board to review milk prices to include new findings as contained in the newly launched Cost of Milk Production Report 2024 by the Kenya Dairy Board (KDB).
Industry data shows that milk delivery processing firms hit 75.68 million litres in December last year, the highest in 29 months following sufficient rains that kept prices stable.
However, government says it has received concerns from farmers that they are yet to benefit from government’s pricing benchmark of Ksh 50 shillings per liter.
Dr Karanja noted that better prices would help farmers safeguard against rising costs of animal feeds, adding that the government is beginning further interventions to address teething challenges such as cooling infrastructure, and taxes in the sector.
The report indicates that overall, milk yield has improved, with average prices offered by cooperatives ranging from Ksh 38 to Ksh 48 at a mean of Ksh 43 per litre.
And on costs and returns of milk production, the report indicates that enterprises in the dairy sector are profitable with profits hitting Ksh 28 per litre.
However when total costs are added, the profit reduce to about Ksh 10 to Ksh 14 per litre depending on system of production.
Another major highlight in the report shows that milk production costs are majorly driven by feeds which stand at between 48pc to 58pc of the cost of milk production, indicating the need for addressing animal feeds costs to reduce overall cost of milk production.
