Shortage of milk expected to continue

THE global supply of milk is growing, but not at the pace the demand has increased.

As a result consumers globally are experiencing shortages of dairy products, with projections that this situation will prevail for at least a further 12 months. Desmond van Jaarsveld, Managing Director of Namibia Dairies, yesterday attributed the international shortage of milk to macro-economic factors such as the drought in Australia, a leading supplier of skimmed milk – a key ingredient to global dairy producers – and the withdrawal of farm subsidies by European countries, which resulted in many farmers abandoning the dairy industry.He added that across the globe the demand for dairy products has increased, referring to the example of China where consumers are increasingly changing to a “westernised” diet, thereby creating an enormous demand worldwide.In the Namibian market, Namibia Dairies holds an estimated local market share of over 50 per cent in respect of all product categories.The local demand for long-life milk (UHT milk) is estimated at one million litres a month, of which the local industry supplies 30 to 40 per cent, with the residual volume coming mainly from South Africa.For many years, consumers favoured UHT milk over fresh milk mainly because of its lower retail price, availability, and longer shelf live.According to Van Jaarsveld, the wheel has turned, with the price of UHT milk increasing worldwide.Currently a litre of long-life milk can cost anything between N$10 and N$13 in Windhoek supermarkets.In February this year, an interim special relief was given to raw milk producers to ensure the dairy farmer’s survival in the short term.This was followed by an annual price increase of eight per cent last month.The industry says this increase was still low compared to the soaring costs of fodder for dairy cows.To encourage farmers to produce more milk, Namibia Dairies offered farmers a premium of 20 cents per litre on top of their quota.The official quota stands at 1,78 million litres per month, with the full quota estimated to be reached next month.Van Jaarsveld said this has not happened in many years.”This is because they are getting their financial reward, they are positive and they are investing in the future again,” he concluded.He however warned against unrealistic price increases, describing those over the past few months as mere corrections of the very low prices paid to producers.The emphasis, said Van Jaarsveld, will be on cooperation between Namibia Dairies and the producers.As stakeholders, he said, Namibia Dairies would continue working together with producers to ensure the sustainability of the dairy industry and affordability of dairy products.Desmond van Jaarsveld, Managing Director of Namibia Dairies, yesterday attributed the international shortage of milk to macro-economic factors such as the drought in Australia, a leading supplier of skimmed milk – a key ingredient to global dairy producers – and the withdrawal of farm subsidies by European countries, which resulted in many farmers abandoning the dairy industry.He added that across the globe the demand for dairy products has increased, referring to the example of China where consumers are increasingly changing to a “westernised” diet, thereby creating an enormous demand worldwide.In the Namibian market, Namibia Dairies holds an estimated local market share of over 50 per cent in respect of all product categories.The local demand for long-life milk (UHT milk) is estimated at one million litres a month, of which the local industry supplies 30 to 40 per cent, with the residual volume coming mainly from South Africa.For many years, consumers favoured UHT milk over fresh milk mainly because of its lower retail price, availability, and longer shelf live.According to Van Jaarsveld, the wheel has turned, with the price of UHT milk increasing worldwide.Currently a litre of long-life milk can cost anything between N$10 and N$13 in Windhoek supermarkets.In February this year, an interim special relief was given to raw milk producers to ensure the dairy farmer’s survival in the short term.This was followed by an annual price increase of eight per cent last month.The industry says this increase was still low compared to the soaring costs of fodder for dairy cows.To encourage farmers to produce more milk, Namibia Dairies offered farmers a premium of 20 cents per litre on top of their quota.The official quota stands at 1,78 million litres per month, with the full quota estimated to be reached next month.Van Jaarsveld said this has not happened in many years.”This is because they are getting their financial reward, they are positive and they are investing in the future again,” he concluded.He however warned against unrealistic price increases, describing those over the past few months as mere corrections of the very low prices paid to producers.The emphasis, said Van Jaarsveld, will be on cooperation between Namibia Dairies and the producers.As stakeholders, he said, Namibia Dairies would continue working together with producers to ensure the sustainability of the dairy industry and affordability of dairy products.