KENYA – The Kenya Co-operative Creameries (KCC) has implemented a move to support dairy farmers by increasing the farm-gate price of milk by Sh5 per liter, effective March 1, 2024.
The decision, announced by Mr. Nixon Sigey, the Managing Director of New KCC, raises the purchase price from Sh45 to Sh50 per litre, aiming to alleviate the impact of rising production costs, particularly in animal feeds.
This adjustment is anticipated to provide substantial relief to dairy farmers, coming at a crucial time as the country approaches the main March-April-May rains season, which is expected to lead to higher milk output.
According to Mr. Nixon, the move is in response to the challenges faced by farmers dealing with escalating operational costs, especially in the realm of animal feed.
“The cost of animal feed has surged significantly, affecting the profitability and sustainability of dairy farming in Kenya,” he said.
“By increasing the farm-gate price, New KCC aims to assist farmers in managing these rising costs and encourage continued milk production amidst financial pressures.”
In addition, he revealed that the move is expected to foster a more resilient dairy sector capable of withstanding the challenges posed by fluctuating market conditions and input costs.
According to recent industry data, a steady increase in milk deliveries to processors, reaching 75.68 million litres in December last year – the highest in 29 months.
This upsurge is attributed to sufficient rainfall, which has also helped stabilize feed prices to some extent.
Furthermore, the data revealed that milk consumption in Kenya reached a record high of 810.76 million litres in the past year, surpassing the previous record set in 2021.
The rising demand for milk, coupled with higher production levels, underscored the critical role of timely interventions like price adjustments in balancing the market and ensuring steady supply chains.
New KCC’s decision to increase farm-gate prices signals a positive outlook for the dairy industry in Kenya, especially in light of the challenges faced by dairy farmers.
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