Processors convert powder milk to tame prices

What you need to know:

Processors have turned to conversion of powder milk into fresh product to stabilise supply to consumers and check against high prices following a shortage of the commodity in the country.
Milk intake in the informal sector has dropped from 63 million litres in January to 43 million litres in June, piling pressure on processors.
Processors are using the stocks that had been stored at Strategic Food Reserve (SFR) to supplement the available stocks.

Processors have turned to conversion of powder milk into fresh product to stabilise supply to consumers and check against high prices following a shortage of the commodity in the country.

Milk intake in the informal sector has dropped from 63 million litres in January to 43 million litres in June, piling pressure on processors.

Processors are using the stocks that had been stored at Strategic Food Reserve (SFR) to supplement the available stocks.

“The intake from farmers has gone down by 40 percent at the moment so we have had to reconstitute powder milk in order to ensure that there is enough supply of the commodity to our customers,” said Nixon Sigey, New Kenya Cooperative Creameries managing director.

Mr Sigey, who is also the chairperson of the Kenya Dairy Processors Association said the state-owned firm is also selling powder milk to other processors and they are releasing 1,000 tonnes.

The MD said the available stocks would last for the next three months giving assurance to consumers that the prices on the shelf will not go up anytime soon.

“Because of enough stocks of powder that we have, we do not expect the consumer prices to go up anytime now,” he said.

The country recorded a glut in milk last year giving room for processors to convert excess commodity into powder.

However, the outbreak of foot and mouth disease in April, the Covid-19 pandemic and the onset of cold season impacted negatively on volumes.

Farmers have also been facing challenges in regard to animal feeds as high cost made it impossible for most of them to afford them.

Agriculture Cabinet Secretary Peter Munya said last week that part of the one million acre Galana-Kulalu irrigation scheme will be used for planting of maize meant for animal feeds processing in order to address the challenge of cost.

“We need to increase the feeds and we are going to use part of the Galana-Kulalu farm for this exercise,” said Mr Munya.

Consumer prices of milk have been relatively low since the beginning of the year with a half litre packet retailing at an average of Sh50 despite a significant rise in farm gate price from a low of Sh25 to Sh33 in March.