Ettenne Terre’Blanche, managing director of the Milk Producers Organisation (MPO), believes the tight economic conditions facing dairy farmers will pass within the next two to three months.
He said the growing international food shortages will continue to support producer prices. The full effect of this might not yet have been felt in South Africa, but it will become more evident as food becomes more expensive internationally. e is also of the opinion that the international food shortages and rising food prices would render the African government more supportive of agriculture.
“Government is starting to realise the importance of farmers and that they also have to make a contribution to ensure food security,” said Terre’Blanche. W hile waiting for farm gate prices to recover, dairy farmers would have to find a balance between supply and demand to prevent further price reductions. “Dairy products, especially high-end products, have been met by some consumer resistance and farmers will have to manage supply to prevent an oversupply in the market,” he added.
He also advised farmers to supply animals with less feed to reduce milk production, dry cattle earlier and cull inefficient cattle to enhance production efficiency. I t seems that input costs might drop – welcome news for farmers. There are already indications of international drops in fertiliser prices due to a decline in oil prices. This might also translate into lower transport costs.
Terre’Blanche, however, is not too optimistic about these developments due to the weakening of the rand. Maize prices have dropped by around 20% since July and soya bean prices are also down by almost 15%. Farmers could mix their own feed until these effects spilled over to feed companies. – Glenneis Erasmus