Dairy sector feels pinch as virus sours business

Wyckiff Kipsang @wsang08

The dairy sector has been worst hit by the effects of the coronavirus pandemic with a drastic drop in milk deliveries to dairy co-operatives and processors.

Data from Kenya Dairy Board indicates that the pandemic has hit  the sector hard,  registering up to 36 per cent decline in deliveries since March, despite availability of pasture and water due to good weather witnessed this year.

A spot-check of the dairy co-operatives in the North Rift region by Business Hub shows that there was a sharp decline in milk deliveries by their members since March when Kenya first reported a Covid-19 case.

“Before Covid was reported, we used to collect 19,000 litres of milk daily but this has dropped to about 7,000 but now it has started to go up to 9,000 litres,” Abraham Rugut, Kabiyet Dairies Cooperative chairperson said.

Most farmers, he added, fear to bring their milk to most dairies since most of them lack equipment such as thermo-guns.

Farmers spoke when Heifer International this week donated Personal protective equipment (PPES) and other equipment to more than 24 dairy co-operatives in seven counties that included Nandi, Uasin-Gishu, Embu and Meru.

“We want to appeal to the government to consider supporting our dairy processors to purchase more milk as to mob up excess milk as part of measures to ensure that the sector recovers,” added Rugut, who is also the Nandi county dairy cooperative union chairman.

Milk deliveries

Some farmers like Alice Kiprono who supplies her milk to Tuiyoluk Dairies Farmers’ Co-operative Society in Moiben, Uasin Gishu County, said she had been forced to reduce the amount of milk she supplies to the entity.

The co-operative has recorded a drop in milk deliveries from 3,000 litres to 1,500 litres daily.

Kenya Dairy Board Managing Director Margaret Kibogy acknowledged that there has been a drop in terms of milk coming from the farm to the formal sector as more is consumed back in homes. 

According to the MD, some products such as yoghurt and cheese witnessed drop in sales owing to closure of schools and other institutions. 

“There has been an increase in demand for long life milk products as more consumers stocked more products due to lockdowns and curfews,” added the MD.

She said that the sector had not utilised the 60 per cent of its installed capacity of infrastructure.

“We have developed standards for processed camel milk and this is one area that investors can also diversify their products due to growing demand for these products.

Consumers are also becoming health-conscious and have preference for organic foods,” Kibogy said.

Tetra Park East Africa Managing director Jonathan Kinisu said it was time for processors and other players to adopt technology and diversify into new products to ensure that the sector is on full recovery.

“What we have seen is that the traditional route is being challenged. The consumer needs are changing and to ensure that faster availability needs to embrace e-commerce to survive through post-Covid,” he added.

Milk deliveries dropped by 8.24 million litres in the first half of 2020 compared to a similar period last year with processors receiving 319.1 million litres.

While the first three months registered a commendable performance 173.36 million litres, the second quarter witnessed a 20.7 per cent or 35.9 million litres less delivered with 137 million litres reaching factories.

Covid-19, reported in Kenya mid-March, continued to adversely affect the sub-sector with June registering 40.25 million litres, being the lowest since March 2017 when 38.64 million litres were delivered.

Dairy farmers

The soured business environment  for the sub-sector coincides with a new move by the government to ensure dairy farmers enjoy better returns from their produce with the adoption of the regulations that will set a minimum price for their produce, denying processors the liberty of lowering prices at will.

Agriculture Cabinet Secretary Peter Munya said last week that the draft regulations have been completed and are now in the office of the Attorney-General waiting to be gazetted.

He said this will curb arbitrary price cuts, where some processors slash the producer price without justification.

“They (regulations) have undergone the public participation process and currently awaiting gazettement,” said Munya. Additional reporting by PD Reporter.