Brookside cuts farmer milk prices on rise in supply volumes

What you need to know:

The highest paid farmer will earn Sh32 per litre down from Sh34 while the lowest will earn Sh27 from Sh29 previously.
The new prices took effect on July 1, according to a circular sent to different cooperative associations that supply the processor.

Brookside Dairy's lowering of the price paid for raw milk in June is setting the stage for other processors to follow suit in the wake of increased supplies.

The highest paid farmer is earning Sh38 per litre while the lowest will earn Sh33.

The prices are based on the volumes of milk delivered to the factory. For instance, farmers who supply between 1-100 kilogrammes will earn Sh33 per kg. Higher prices are offered to those taking 101-5,000kg. Anyone providing more than 5,000kg earns Sh38 per kilo.

The new prices took effect on June 1, according to a circular sent to different cooperative associations that supply the processor.

“Please note that the raw milk prices have been reviewed,” said Mr John Gethi, director in charge of milk procurement at Brookside Dairy.

Brookside is the first processor to cut the raw milk prices due to rising volumes after the end of a dry weather spell.

Market share

Brookside controls 44 per cent of the milk market followed by the New KCC at 20 per cent while Githunguri Dairy Farmers Co-operative is ranked third with 17 per cent. Sameer — processors of Daima Milk — commands a six per cent market share.

Consumer prices especially for the long life milk have come down by Sh10 to sell at Sh50 currently.

However, the price of fresh milk, which is popular in most households has not changed, with most brands retailing at Sh46 in major supermarket outlets.

Naivas Supermarket last month lowered the price of milk dispensed through vending machines, putting pressure on milk processors.
It is currently selling a litre at Sh65, down from Sh70 following the improved supply.

Chief executive officer of the Kenya Dairy Farmers Federation David Bett said there has been an increase in milk volumes from April in about 25 cooperatives that they operate.

He said the volumes had increased from four million litres in March to 6.1 million litres in May, but warned that the prevailing cold weather would lower supply.

“There has been a significant improvement in volumes since April, but the quantities might drop in the coming days as a result of the July cold season,” said Mr Bett.