Farmers earned a record average price equivalent to Sh42 per litre of milk sold in the formal market last year amid increased demand for the commodity, according to the latest Economic Survey.
The price jumped 26.5 percent from Sh33.2 per litre in 2020, boosting total earnings by a large margin.
“The value of marketed milk increased by 48.2 percent from Sh22.7 billion in 2020 to Sh33.7 billion in 2021, mostly due to better prices coupled with higher volumes of the product delivered,” the survey reads in part.
The volume of marketed milk increased by 26.6 percent from 682.3 million litres in 2020 to 801.9 million litres last year.
Average retail prices of a 500ml packet rose to Sh49.6 from Sh48.72 in 2020.
This year, prices have reached highs of Sh80 for a 500ml packet in major supermarkets in what has been attributed to inadequate supply linked to lower-than-expected rainfall.
While farmers got better prices for their produce last year, they also continue to grapple with higher prices of animal feeds.
The price of a 70-kilogramme bag of dairy meal, for instance, has gone up from Sh2,500 in August last year to Sh3,400.
Processors have been lobbying the government to allow the import of yellow maize with minimal GMO content to tame the price of animal feeds.
More people consumed dairy products last year, with milk supplied from the local market unable to meet demand, leading to imports from Uganda.