Will the price of milk also spike?

2016-05-12 06:00

Milk prices might soon also hit consumers’ pockets as a result of the serious drought and insane increase in electricity tariffs which negatively affected dairy farmers.

“Producer prices are currently at virtually the same level as almost two years ago, whilst input prices are much higher,” said Dr Chris van Dijk from the Milk Producers’ Organisation.

“Milk processors should seriously consider the level of producer prices in order to enable the producer to sustain production. Otherwise the supply of raw milk will be under pressure from June onwards.”

The serious drought has led to the steep rise in grain prices and it is expected that the high cost of feed will continue until mid-2017.

“We are of the opinion that it is unfair that the dairy farmer bears the brunt of cost pressures. Retail prices on dairy products on the shelf began to rise as early as March.”

The Milk Producers’ Organisation is of the opinion that in cases where processors have already succeeded in negotiating higher prices with retailers, they should invest part of that increase in ensuring the sustainability of the dairy farmers’ production capacity.

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