Prices reduction hit local dairy farmers hard

Namibia’s local dairy industry has seen its condictions worsen due to proposed price reductions of raw milk which according to the Namibia Agricultural Union  could potentially mean the end of business for some of the producers.

 NAU reported that on 23 February 2018 a special meeting was held between the management of the Dairy Producers Association and representatives of the processor regarding a raw milk price reduction for Namibian producers of 10 cents per litre and a further possible 10 cents reduction by the end of April 2018.

“This will be the second price reduction in the last 7 months for producers and  could potentially mean the end of business for some of the dairy producers,” said the farmers’ union.  

It is reported that in addition to a price reduction, payments of producers are being deferred on a monthly basis while producers are also warned not to increase any milk production, as excess milk will most probably not be taken up in the market. 

This critical situation in the dairy industry can be ascribed to mostly the influx of cheap UHT milk and other closely related dairy products into Namibia, said NAU.

 The past two weeks, imported UHT milk, mostly from RSA, was selling on shelves of Namibian retailers as low as N$10.99 per litre.

“In reality this milk is cheaper than 1liter of water bottled in Namibia selling in the same shop!  In addition, the low imported UHT milk found on Namibian shelves is lower than the same packs selling on the same day in RSA.  That leaves a serious question mark,” said NAU.   

 The union has warned that the situation in the Namibian dairy industry needs immediate and serious attention.

The long awaited Bill (to control import and export of dairy and dairy products) is essential and it is due to be tabled in Parliament this year.

Meanwhile, in other farming news, the Livestock Producers Association (LPO) in Namibia rallied small stock producers this past week in Keetmanshoop for a brain storming session to formulate a vision for the small stock industry.  

As starting point, representatives agreed that there is a lack of correct and reliable marketing figures for small stock. 

Various actions were identified to address this issue.   

The concern regarding a reduction in small stock production was high on the agenda. 

Although it seems that the small stock industry has been in a more favourable position than the beef industry in terms of profitability the past five years, small stock production has decreased drastically.

 Reasons that were speculated on varied from an increase in venereal diseases of the rams, an increase in predator numbers, an increase in theft, and the long term drought situation. 

There is also a tendency to change from small stock production to cattle and game production.   

Producers in general have lost their trust in the industry and this negatively impacts on investments.

 Management practises were also looked at as well as the age group of the majority producers which results in less further investments, especially in infrastructure

The marketing environment has an impact on the production environment and interference in this sector together with issues such as land reform creates frustration and uncertainty. 

Small stock representatives at the meeting was however of the opinion that production could pick up again and there must be an investigation how to change the methods in order to realise an open border, whilst still operating within government policies.

The day resulted in positive suggestions that will receive serious attention in the following weeks.