Dairies urged to cut output

2008-11-04 00:00

THE Milk Producers’ Organisation of South Africa (Mposa) has advised milk producers to cut down on production if the market is to stabilise soon.

Mposa vice-chairman Freddie van Zyl told The Witness yesterday that overproduction of milk has led to producer prices dropping, destabilising the industry.

“This is why we are advising that we need to cut down on production. This is not a must, but merely advice, and it would help the market to stabilise soon.”

Van Zyl said that “ideally milk producers would have to cut down their production by about five percent in the next two to three months”. If this is not done immediately, he said, it will take longer for the market to stabilise and for milk producers to start making profits again. But if implemented immediately, the market may stabilise around January next year.

An expert in the industry, who did not want to be named, said that the advice was reasonable. “There is no other way to do it apart from stimulating demand. But how do you stimulate demand in these tough times?” he said.

bmbanjwa@witness.co.za

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