Milk shortage yet another blow to dairy industry

The embattled dairy production industry is experiencing yet another blow following the Milk Producers’ Organisation’s (MPO’s) announcement that the current shortage of milk products on retailers’ shelves is likely to continue throughout winter.
Issue Date: 13 April 2007

The embattled dairy production industry is experiencing yet another blow following the Milk Producers’ Organisation’s (MPO’s) announcement that the current shortage of milk products on retailers’ shelves is likely to continue throughout winter. MPO managing director Bertus de Jongh said in the long term these shortages will negatively impact on the dairy industry as consumers will turn to alternative food sources, resulting in it losing market share that will be difficult and expensive to regain. “These shortages are a direct result of price signals relayed to producers two years ago when the milk price dropped unexpectedly. Milk production is a biological industry that operates in long-term cycles, and the message from two years ago is now being followed through.”
 
He added the sharp increase in maize and feed costs combined with low producer prices forced milk farmers to reduce production to survive financially. The weakening rand has also made it too expensive to import dairy products. K ZN dairy farmer and chairperson of the province’s MPO branch, Quentin Simpson, confirmed there has been a decline in milk production. “Dairy farmers are struggling to survive with low profit margins as a result of inadequate milk prices versus escalating input costs,” Simpson said. “The majority of dairy farmers leaving the industry are small-scale guys because they can’t afford to pay transport costs for milk.” – Lloyd Phillips