Dairy farmers currently facing production shortages

By Drum Digital
06 April 2016

Dairy farmers are already facing production shortages and are most likely to have supply issues over the next few months.

Consumers were having a hard time coming to grips with food price hikes caused by the recent drought and to add to that already heavy burden, milk prices will soon increase as well.

“The price is expected to increase in May and will hike operating costs for the entire milk value chain, leaving retailers with no choice but to increase the price consumers pay for milk and dairy products,” according to Paul Makube an FNB senior agricultural economist. This will cause us to cut back even more on our spending.

“Dairy products play an important role in the diet of consumers. Therefore, an increase in the price of milk will put more pressure on the already stretched disposable income, pressurising them to spend wisely and cut back on luxuries,” Makube said.

The hike in milk prices is due to the severe drought combined with the weakening economy. The combination of the drought and the weakening economy has resulted in concerns that milk, which is a staple food, will run  low over the next coming months.

Another problem dairy farmers would be facing soon is the electricity tariff hike coming into effect as of this month. As Makube said- “, the electricity tariff increase coming into effect this month will severely drive up input costs for farmers and milk processors as they rely on equipment that consumes a lot of energy”.

The Milk Producers’ Organisation has welcomed the increase as spokesperson Koos Coetzee said dairy farmers were struggling to make a profit under the current conditions.

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