Farmers face low earnings as processors cut raw milk prices

Politics and policy

Mr Nixon Sigey, the New KCC managing director. PHOTO | SALATON NJAU 

By GERALD ANDAE

Farmers face low earnings as processors cut raw milk prices amid increased supply which also promises consumers more affordable products.

The New Kenya Cooperative Creameries (New KCC) is the latest processor to cut its price by Sh3, just a month after Brookside Dairy reduced the amount it pays per litre by Sh2.

A farmer delivering milk to the New KCC will starting next month earn Sh36 per litre while those who depend on the company’s transport will be paid Sh34 per litre.

New KCC managing director Nixon Sigey says the move has been informed by an increase in the volume of milk from farmers.

“This is a factor of demand and supply. We have witnessed a significant growth in volumes and that is why we have reduced the farmers’ price,” said Mr Sigey.

The firm has also reduced the retail price of a 500ml packet of long life milk from Sh60 to Sh50, while fresh milk will cost Sh48 down from Sh50.

Other processors have also reduced the price of the commodity, which is a relief to consumers who have been grappling with increased household budgets.

Brookside Dairy lowered the price paid for raw milk in June setting the stage for other processors to follow suit. The firm has already sent an alert to farmers informing them of a further price drop starting August 1.

“Dear suppliers, due to prevailing market conditions raw milk prices have been reviewed downwards by Sh2 per kilo effective August 1, 2015. For details, contact SMS 22323,” read a message sent by Brookside to cooperatives.

READ: Brookside cuts farmer milk prices on rise in supply volumes

Brookside’s highest paid farmers earn Sh38 per litre while the lowest are paid Sh33. However, farmers without their own means of transport earn Sh6 less.

Kenya Dairy Farmers Federation chief executive David Bett said the volume of milk had increased from four million litres in March to 6.1 million litres in May, but warned that the prevailing weather conditions could lower supply.

“There has been a significant improvement in volumes since April, but the quantities might drop in coming days as a result of the July cold season,” said Mr Bett.