The reopening of food outlets is a great relief to the milk industry, especially to a number of mozzarella processors and farmers who are almost exclusively dependent on the fast food industry, says Nico Fouché, chief executive of Milk SA.
Closures of the fast food industry, hotels, guesthouses and restaurants during the covid-19 lockdown had a negative impact on the industry. The lockdown resulted in the sudden loss of an important market for dairy products. An important part of the demand for cheese disappeared overnight and it spilled over to the rest of the dairy industry.
As World Milk Day was celebrated today, Milk SA and its two members, the South African Milk Processors’ Organisation (Sampro) and the Milk Producers’ Organisation (MPO), said the local dairy industry is among the most competitive in the world.
However, Fouché said the demand for food products such as dairy was already low before the national lockdown and regulations exacerbated the situation further.
Fortunately, milk producers have not had to dump milk because of the low demand during the lockdown, as have been the case in some other countries. Fouché says panic buying by consumers before the lockdown created additional processing and storage pressure for long-life milk in March and April.
“The weaker demand for fresh milk during the lockdown created opportunities to divert the raw milk for the processing of other products with longer shelf lives, such as hard cheeses and milk powders,” he says.
According to the organisation, while the lockdown did not prevent the production of unprocessed milk and the production, distribution and marketing of the different types of dairy products, it has resulted in increased costs. The increased costs are due to additional medical costs in respect of employees and additional administrative costs. Further costs include those for additional actions required to protect the health of employees on farms, in factories, during transport of employees and in the transport and distribution of unprocessed milk and the different types of dairy products.
According to Fouché he is not aware of any job coronavirus-related losses in the milk industry, but he says only time will tell how the market is going to respond to the weaker economy or recession. This in turn will tell how raw milk production and processing must adapt to consumption trends.
Fouché says Milk SA is deeply touched by the loss of lives lost due the the covid-19 pandemic and its impact on living quality and crippled economies.
