Milk shortage: Clover to hike prices twice in 2012

2011-12-06 00:00

CONSUMERS are set to bear the brunt of Clover’s decision to pay milk producers more, although the price increases are said to be long overdue and critically important to ensure the sustainability of South Africa’s milk-producing industry.

Milk producers, who recently warned that the supply of milk could be threatened due to lower producer prices, have had to deal with increases in the cost of major inputs, such as maize, fertiliser and diesel.

Emphasising the fact that milk producers are price takers while the larger processors are price setters, the CEO of the Milk Producers’ Organisation, Bertus de Jongh, recently warned of a milk shortage next year.

Clover said that it will implement a price increase of 6,5% in January 2012 and an increase of 6,9% in February 2012, but added that a shortage could still occur by mid-2012.

Clover CEO Johann Vorster said further price adjustments could be on the cards next year, depending on input costs and the supply of milk. “It is regrettable that the hard-pressed consumer has to be subjected to these increases. We will continue to monitor the situation to ensure that we pay a fair milk price to milk producers …” Vorster said.

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