..KENYA – Dairy farmers in Kenya suffered significant financial losses in 2023, with an estimated Sh14.7 billion lost due to a record milk glut.

According to the latest Economic Survey 2024, 290 million litres of milk went to waste last year, a 50% increase from the 193 million litres wasted in 2022. This marked the highest level of wasted milk in four years.

The surplus milk production, driven by favorable weather conditions, created a situation where the market cannot absorb all the milk produced, leading to substantial waste.

Farmers, lacking sufficient storage facilities, were forced to dispose of the excess milk. Farm-level losses were exacerbated by poor transport infrastructure, resulting in spoilage, spillage, and forced home consumption.

The waste not only represents a significant financial setback for farmers but also poses a threat to the country’s food security.

Out of the 4.57 billion litres of milk produced in 2023, 6.3% was wasted, an increase from the 4.2% loss recorded in the previous year.

Farmers were paid an average of Sh5,083 (US38.36) for every 100 litres of milk delivered to the market in 2023.

This price meant that for the 290 million litres lost, producers potentially missed out on Sh14.7 billion (US$110.9 million) in earnings, up from Sh9.1 billion (US$73.2 million) in foregone income the previous year when the price for 100 litres was about Sh4,720.43 (US$35.63).

The increased production continued into 2024, fueled by heavy rains that improved cattle feed and boosted milk production.

Meanwhile, in response to the milk glut, the Kenyan government announced a Sh500 million (US$377.3K) initiative to purchase and manage the excess milk.

However, the challenge persists as most of the milk produced is processed by companies that may not have the capacity to handle such high levels of production.

As the El Niño rains continued to impact the country, the government’s intervention aims to mitigate the financial impact on dairy farmers and address the surplus production.

The need for better storage solutions and transport infrastructure remains critical to prevent future losses and ensure the sustainability of Kenya’s dairy industry.

 

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