In Summary
  • Dairy farmers are now expected to earn as low as Sh26 per litre of milk from an average of Sh38 earned before the review.
  • The farmers have protested the cut arguing that low prices in the wake of high cost of feeds will keep them out of business.
  • The Kenya Dairy Board (KDB), the sector regulator, says milk production has steeply increased since November last year, prompting processors to review the price downwards.

Processors have cut the price of raw milk by Sh3 a litre as the market responds to a steep rise in production but retail prices remain unchanged.

The move has upset farmers currently grappling with high cost of production resulting from increased cost of feeds, with some expected to earn as low as Sh26 per litre of milk from an average of Sh38 earned before the review.

The co-operatives where farmers are attached to normally deduct about Sh4 per litre from farmers as administrative fee and transport cost usually charged by the processors.

“Dear supplier, due to market forces beyond our control, raw milk prices have been reviewed downwards by Sh3 per kilogramme from January 21,” reads one of the text messages sent to farmers.

The Kenya Dairy Board (KDB), the sector regulator, says milk production has steeply increased since November last year, prompting processors to review the price downwards.

“There has been an increase in volumes of milk coming in from farmers and this is what has forced processors to adjust the price. It is a case of supply and demand,” said Margret Kibogy, KDB managing director.

Ms Kibogy said the two main firms — Brookside and New KCC — are now processing an average of 1.2 million litres of milk daily from 800,000 litres around November last year.

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