Milk glut..falling prices

[KenyanPlato]

• Tweet

Farmers seeing red a dairy processors cut milk prices by 4 and or more

What is causing glut
Seasonal over supply
Prices will pick up as production decreases during winter months of may to July
Current county intervention. Muranga and other counties have made dairy farming a focus giving subsidies that are creating over supply of milk

[RV Pundit]

Make powder milk and ship it to Nigeria.

[Kim Jong-Un's Pajama Pants]

Make powder milk and ship it to Nigeria.

This makes sense.  Especially in a commodities exchange.

[gout]

This is interesting if not surprising. A milk glut in February heading to March which are quite dry? The Kenyan farmers are doing something right in productivity. Eggs and now milk.

Government's interventions are required to enhance efficiency on the market side - though governments are very happy when things such as eggs and milk are dirty cheap. In milk efforts to formalize have failed with Kenyans continuing to consume 90% of the milk unprocessed.

Farmers need to accept forces of supply and demand and stop the romantic view of farming as a gold mine.

The powdered milk market is a hard sell given the deal between Kenyattas and Danone plus Abraaj who have the West and Northern African market locked.

We need to embrace simple value addition processing such as drying milk/vegetables/fruits/ meat in times of plenty, roasting coffee, spinning cotton, avocado cooking and beauty oils at the village levels. Most average nyeuthi still believe it is the gods who does this 'magic' in the US, Europe and China. This is our greatest undoing so far!

Make powder milk and ship it to Nigeria.

This makes sense.  Especially in a commodities exchange.

[hk]

Its very unusual to have oversupply of milk in the dry months of January ,February and early march . That data doesn't seem right. Its very hard to believe that farmers have all of a sudden invested heavily on feedstuffs and storage to avoid the usual decline in dry months. Fresha( Githunguri dairy) hasn't lowered the farm gate price. Its the barometer since its farmers' owned and pays out the best prices among all dairies.
If there's milk glut, the retail prices should also be going down to increase consumption.
The Eggs glut, those eggs are coming from Uganda where production is cheaper since poultry feeds are cheaper there.

[KenyanPlato]

Think about it over 10 counties have joined the market offering heavy incentives..plus it rained in February

[hk]

Think about it over 10 counties have joined the market offering heavy incentives..plus it rained in February

Which are this counties that all of a sudden are producing milk? Muranga, the dominant dairy is aspendo dairy based in Kangema, they're not seeing huge increased milk production(we share the same office block with their nairobi office), the incentives offered by the governor haven't increased production. January and february have been some of the most driest and hottest months of late. If the data is correct, it means in April to August farmers will be pouring their milk. Anyhow consumption could increase if we urbanized more, raise incomes etc.   

[KenyanPlato]

Think about it over 10 counties have joined the market offering heavy incentives..plus it rained in February

Which are this counties that all of a sudden are producing milk? Muranga, the dominant dairy is aspendo dairy based in Kangema, they're not seeing huge increased milk production(we share the same office block with their nairobi office), the incentives offered by the governor haven't increased production. January and february have been some of the most driest and hottest months of late. If the data is correct, it means in April to August farmers will be pouring their milk. Anyhow consumption could increase if we urbanized more, raise incomes etc.

Then We can assume consumptioj is way down..the data I have seen claims we produce 793 000 000 liters

[yulemsee]

Competition from Uganda, look for a brand called Lato, if things continue as they are they will be the biggest brand in Kenya

[KenyanPlato]

Yulemsee thanks ..it seems kaguta is flooding our market. Farmers a throwing away eggs due flooding of market with cheap imports

[hk]

Competition from Uganda, look for a brand called Lato, if things continue as they are they will be the biggest brand in Kenya

I know lato, why would they grab a big marketshare in kenya? Are they cheaper?Better quality? Maybe pearl dairy(lato) apart from selling fresh pasteurized milk, its selling powder milk as raw material to Kenyan processors which is reducing the processors' fresh milk uptake. Thus depressing the prices.  Brookside which has powder milk processors is converting powder milk which it normally makes when there's abundant cheap supply to fresh milk. This is the reason I think there's a "glut". Producing milk in dry season is expensive cause feedstuff like hay gets to be more expensive. Farmers affiliated with brookside are being hosed and cause of its dominant position the effect is widespread.

[RV Pundit]

Actually it not only lato; I have had transport contracts to take milk from northern Uganda to Mombasa and nairobi. This unprocessed milk. Uganda is really eating kenya market share in agri sector. Kshs is just too strong....and that is maybe the problem.

The problem is we depend on Uganda feeds for our livestock feeding. So when Uganda finally figured that they were exporting their feed to kiambu instead of using it - that was it.The solution is for our farmers to compete with Ugandas :- or to try other business.

[KenyanPlato]

Economists are saying Ugandan Farmers are lamenting Kenyans goods killing their market. It seems this is an illegal dumping from other markets. Eggs were brought from China

[hk]

 It seems the glut is real but not from kenyan farmers. Uganda cheap powder milk and raw milk is flooding the market https://www.standardmedia.co.ke/article/2001316318/dairy-farmers-protest-drop-in-milk-prices .  However the question is all those processors importing milk from uganda and lowering farm gate prices, how come they aren't lowering price of milk? https://www.businessdailyafrica.com/markets/marketnews/Probe-in-the-pipeline-as-milk-prices-stay-high/3815534-5022112-10cg8j8z/index.html

[hk]

Kenya dairy board wants to control prices of raw milk. This sector will soon collapse https://www.nation.co.ke/news/New-proposed-dairy-industry-regulations-/1056-5037548-o73yko/index.html . What exactly are the new regulations supposed to solve? I have never heard of disease outbreak in kenya due to selling of raw milk. Already farmers are complaining of low prices, this will only exacerbate the situation. 

[KenyanPlato]

This a bill meant to protect inefficient processors ..the processors are fighting in a market that is tightening due to supply issues

[RV Pundit]

Public participation is really great concept otherwise such unrealistic laws get passed.

[hk]

There's no milk glut https://www.businessdailyafrica.com/markets/commodities/New-KCC-turns-to-milk-powder-as-supplies-dip/3815530-5041642-ryn517z/index.html brookside through kenya dairy board is trying to control price of raw milk. With control of raw milk prices, processors profit margins are maintained if not increased. The monopoly authority should be looking at this. This are some of the  reasons why uhuru and jubilee government are unpopular in central.

[gout]

Which kenyans are these importing milk from Rwanda?? Was this the reason Uhuru went to see Kagame and has invited Museveni??

Kenyans who bought milk from Rwanda had containers held in Uganda for days until tens of thousands of litres were spoilt.

https://www.theeastafrican.co.ke/news/ea/Paul-Kagame-Rwanda-row-with-Uganda-its-all-politics/4552908-5041282-1275sr8z/index.html

[RV Pundit]

I am in transport business - lots of milk is trucked daily from Uganda, Rwanda and even South Sudan. Destination mainly Nairobi and Mombasa. The same way you've maize germ/bran - being transported mainly to Nairobi & Thika & Kiambu. Maize is mainly taken to Kitale and such places - for blending with local high breed maize before being sold to millers. Timber from Congo end up in Nairobi and Mombasa...mostly for export. Then you've lots of coffee beans & tea destined for Mombasa export....that is kind of return cargo people generally bring back to Kenya. Maybe once in a while  you get pineapples and watermelons. Small trucks and pickups bring in eggs...and fish.

Which kenyans are these importing milk from Rwanda?? Was this the reason Uhuru went to see Kagame and has invited Museveni??

Kenyans who bought milk from Rwanda had containers held in Uganda for days until tens of thousands of litres were spoilt.

https://www.theeastafrican.co.ke/news/ea/Paul-Kagame-Rwanda-row-with-Uganda-its-all-politics/4552908-5041282-1275sr8z/index.html