This was according to South African Milk Producers’ Organisation (MPO) economist, Dr Koos Coetzee. He said international prices had risen by 50%, while local prices had remained the same, despite rising production costs. Although prices might still improve slightly, he was not expecting dramatic changes. “Input costs remain high, which puts farmers’ profitability under pressure,” he said.
Coetzee added that due to low price margins, production was also slow, running on par with last year’s production. In 2012, total local production was 2,7 billion litres, which was 4,5% higher than 2011, while demand rose by 4% in the same period.
MPO president Bertus de Jongh said that because of high input costs, farmers were struggling to become profitable. Producers were paid on average only R3,65/l. He said that there were only 2 044 producers left in South Africa.