Dairy sector sees 19.2% surge in milk purchases

KENYA – Kenya’s dairy sector is experiencing a significant boost, with a record 19.2% increase in milk purchases by processors in the first half of 2024, according to new data from the Kenya Dairy Board (KDB).

The surge in milk volume, which reached 437.7 million liters from 367.1 million liters in the same period last year, was attributed to favorable weather conditions that led to sufficient grazing pasture and fodder and a decrease in dairy input costs.

KDB highlighted that the average price of 100 liters of milk rose to KES 5,083, a 7.6% increase from KES 4,720 the previous year. This marked the fifth consecutive year of rising milk prices, which has persisted since 2019 when prices fell to KES 3,000 per 100 liters from KES 3,530 in 2018.

Brookside Dairy Limited, a privately owned company, dominated the market with a 40% share, followed by the state-owned New Kenya Cooperative Creameries with 25% and Sameer Agriculture Livestock with 14%.

Other key players include Githunguri Dairy Cooperative (12%), Pascha-Uplands Premium Dairies and Food (1.7%), Musty Distribution (3%), and Dodla Dairy Kenya (0.09%), while various other processors collectively hold a 3.4% market share.

Despite the increase in production, demand for dairy products in Kenya still exceeds supply, leading to a reliance on imports, particularly from Uganda. This demand-supply gap underscores the importance of continued growth and investment in the sector.

Kenya’s dairy industry is among the top in Africa and the leading in East Africa, with an estimated growth rate of 3%-4% per year.

The dairy value chain contributes significantly to the country’s economy, accounting for 4.5% of the national GDP, 14% of the agricultural GDP, and 44% of the livestock sub-sector GDP.

The sector supports approximately 1.8 million smallholder households, employing around 750,000 people directly and 500,000 indirectly. The total annual milk production is currently estimated at 4.6 billion liters.

In a bid to further revolutionize the sector and enhance small-scale farmers’ incomes, the Principal Secretary of the State Department for Livestock Development, Hon. Jonathan Mueke, launched the Kenya Dairy Industry Sustainability Roadmap 2023–2033 through the KDB.

This 10-year plan aims to double milk production per cow and increase the annual milk output from five billion liters to ten billion liters.

Mithika Linturi, the Cabinet Secretary for Agriculture and Livestock Development, emphasized the roadmap’s transformative goals during its launch in Nairobi.

He highlighted the need for strategic interventions, such as improved access to fodder and feeds, to enhance daily milk productivity per cow.

The plan also aims to increase the formally marketed milk percentage from 30% to 50%, significantly boosting small-scale dairy farmers’ revenue to KES 56,000 monthly.

The Kenya Dairy Industry Sustainability Roadmap represents a forward-looking approach to addressing the challenges and harnessing the opportunities within the dairy sector.

The roadmap, which focuses on improving productivity, marketing, and farmer incomes, is set to propel Kenya’s dairy industry to new heights.