New KCC raises farm-gate prices by Sh5 a litre

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The entrance to New Kenya Cooperative Creameries Eldoret factory in Uasin Gishu County on February 06, 2023. PHOTO | JARED NYATAYA | NMG

The New KCC has increased the farm-gate price of milk by Sh5 per litre from Friday, providing a boost to farmers squeezed by rising costs of production. Mr Nixon Sigey, managing director of the state-owned milk processor, said the company will pay Sh50 per litre of milk, up from Sh45.

"We have been buying milk from farmers at Sh45 per litre but after consultations, we have agreed to increase the price to Sh50 per litre starting March 1, 2024," he said in an interview.

"The move is aimed at cushioning farmers who are incurring high operating costs for example on animals feeds to produce milk."

This is expected to provide a major boost to farmers amid projected higher output on improved weather as the country heads to the main March-April-May rains season. Milk deliveries to processors have been on a climb since the second half of last year on improved rains—helping to partly offset the effect of sharp increases in the cost of feeds.

Industry data shows that milk delivery to processing firms hit 75.68 million litres in December last year, the highest in 29 months following sufficient rains that kept prices stable.

It was the highest intake of milk in the formal sector – milk sold by registered processors – since May 2021 when sales hit a high of 77.33 million litres, according to data from the Kenya Dairy Board.

Milk consumption remained high throughout last year, with the full-year uptake hitting a record high of 810.76 million litres.

This is an increase of 7.33 percent from 755.34 million litres that were consumed in 2022.

Last year’s consumption of the popular produce has now surpassed the previous record of 801.91 million litres, which was set in 2021.

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