Kenyan farmgate milk price rose by 5.7% in 2023

KENYA – Kenyan farmgate milk price showed a 5.7% increased in 2023, rising to Sh49.9 per liter, up from Sh47.2 in 2022.

This price hike came as milk consumption per capita also saw an increase, growing from 78.3 liters to 86.1 liters. The rise in farmgate prices has been a relief to farmers facing high production costs, particularly for inputs like dairy meal, which saw significant price surges last year.

Meanwhile, Kenya’s dairy sector is navigating increasing costs, with milk processors such as the Kenya Co-operative Creameries (KCC) stepping in to support producers.

On March 1, 2024, New KCC implemented a Sh5 per liter increase, raising the price from Sh45 to Sh50. This adjustment was announced by KCC Managing Director Nixon Sigey, who emphasized that the move aimed to help farmers manage rising operational costs, particularly the skyrocketing prices of animal feed.

Mr. Sigey stated that New KCC’s price increase is expected to encourage continued milk production and strengthen the dairy sector against financial pressures.

The adjustment was 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 was 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.

The dairy sector’s resilience was highlighted by a notable rise in milk deliveries to processors, which reached 75.68 million liters in December 2022, the highest level in 29 months.

Moreover, national milk consumption surged to a record high of 810.76 million liters, surpassing previous records and indicating the growing demand for dairy products in Kenya.

In a recent address in Aldai Constituency, Nandi County, President William Ruto called on New KCC to further increase the price paid to farmers to Sh53 per liter, stating the importance of supporting dairy farmers in managing rising input costs and encouraging higher production.

Data from the Kenya Dairy Board revealed that overall milk consumption in 2023 rose to 755.34 million liters, a 7.33% increase from the previous year, reflecting the growing demand for dairy in the country.

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