Lactalis South Africa cuts farm-gate milk prices

SOUTH AFRICA – Lactalis has reduced its milk price by 70 cents a litre, about 10% of what the processor pays farmers, putting dairy farmers under pressure.

The 70 cents is not a single reduction. Eyewitness News reported that Lactalis lowered its raw milk price by 20 cents a litre in September and by another 20 cents in October.

A further 30-cent cut has been proposed for November, bringing the total reduction for the year to 70 cents a litre.

Dairy co-operative Samilco, which accounts for around 12% of South Africa’s milk production, has approached the Competition Commission, warning that the reductions threaten the survival of local producers already battered by soaring input costs, natural disasters, and disease outbreaks.

According to André van Heerden, Chief Executive of dairy cooperative Samilco, Lactalis is pushing dairy producers in the Eastern and Western Cape towards losses and could drive some out of the industry.

He linked the price cut to a surplus of milk in the market. He noted that if the cut is meant to clear that surplus, retail prices on the shelf should come down as well.

Producers have also lost some export contracts in the Middle East, particularly in Saudi Arabia, leaving more milk competing for space in the local market.

Additionally, he warned that if many dairy farms close, South Africa could end up relying more on imported milk, and that shipping, import and transport costs would then likely push prices up for consumers.

Milk Producers’ Organisation (MPO), told The Money Show that the average South African dairy farmer milks about 700 cows.

The Milk Producers’ Organisation (MPO) reported that the average South African dairy farmer milks about 700 cows.

Fanie Ferreira, CEO of the Milk Producers’ Organisation, stated that one of the MPO’s largest members, in the Tsitsikamma area, would lose about R12 million over a year if the cut continued.

He added that the cuts come as farmers recover from the foot-and-mouth disease outbreak, and that some regions have few milk buyers, leaving farmers with little choice about where to sell.

Milk SA figures cited in the October report on dairy farmers cutting costs to the bone show 879 milk producers in January 2026, down from 1,053 in January 2021.

The average farm-gate price was (US$0.43) R7.06 a litre in 2025, with a preliminary February 2026 figure of (US$0.44) R7.17, so a 70-cent cut takes roughly a tenth off a farmer’s income per litre.

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