Have you noticed the increase on the price of milk these days? The current increase is likely due to the high cost of cattle feed, says Colin Wellbeloved, chairperson of the Milk Producers’ Organisation of South Africa (MPO).
According to Wellbeloved, dairy farmers are caught between a rock and a hard place. The price of dry feed, including maize and soya beans, have risen sharply, making it more expensive for Mzansi’s dairy farmers to produce milk
The Stats SA consumer price index, released in April, noted that the categories with the most significant impact on food prices were meat, milk, eggs, cheese, oils, and fats.
Fresh and long-life full cream milk saw annual rises of 6,5% and 5,2%, respectively. Sour milk (19,2%) and flavoured yoghurt (10,2%) also recorded high annual price increases.
Today, 1 June, marks World Milk Day, an international day established by the Food and Agriculture Organisation of the United Nations (FAO) to recognise the importance of milk as a global food. Food For Mzansi caught up with Wellbeloved.
Noluthando Ngcakani: A burning question on the lips of any milk lover would be, what is the reason behind this sharp increase on the milk in the country?
Colin Wellbeloved: We are not able to keep up with the input cost at the moment. Our input costs have risen tremendously. That is mostly to do with the maize price and the soya price which is also something we have very little control over.
Where have dairy farmers mostly felt the impact in terms of the rise on input costs?
For the last 18 months we have been getting paid between R5.60 and R5.90 per litre. The price of feed has risen well over 30% – 50% specifically with regards to maize and soya.
Diesel has been slightly smaller; we have only seen a 25% increase on diesel and as dairy farmers we obviously do not use as much.
The price of fertilizer is generally related to the price of fuel, every time the fuel price goes up. This time last year it was about 30 US$ per barrel it is now 68 US$ and the fertilizer price is linked to the price of fuel.
Is there any possible relief in sight to mitigate the current challenges that plague dairy farmers?
Generally, farmers have not been able to stimulate production as much as we could’ve. We really do not have any influence on the price of milk whatsoever.
We would really love to keep trying to have more influence, but we are at the mercy of the free market.
We try to grow as much food as we possibly can for ourselves on our farms.
South Africa has one of the biggest dairy herds in the world and that has helped us keep the dairy prices down, but it really comes down to what the cost of us producing food for these herds.
If our milk price does not go up fast enough for us, then we lag and we cannot make those investments.
Now there is just no fuel left in the tank for farmers we cannot keep borrowing money to buy food if it is not going to pay in the long run. We just producing with what we can grow ourselves and it has been challenging the last 18-months or so to be honest.
How have you survived? And how have dairy farmers become innovative in keeping up with the supply?
What we do not ever do is try and ask for pity as farmers. But we have been feeling quite pitiful in the last 18 months because the prices really have not made it worth our while to continue producing.
We are producing about five percent less milk than we were this time last year. For the first three months of the year, we were five percent down on production, it does not sound like a lot, but we produce 3.4 billion litres a year.
Milk is seasonal we produce for 12 months in the year, but we produce more milk in spring and summer than we do in autumn and winter and that because of how fast fodder will grow.
“I assume the cost on our inputs has probably gone up because of Covid. We import a lot of our soya bean into this country which is a large part of a cattle diet.”
The fast the grass grows the more milk we produce but we also measure month on month, January, February and March we were 5% down for each of those months, I see April was a bit better were only 0.6% down.
I think that the secondary industry the processors and retailers saw that production was dropping and they tried to stimulate it, but I think it was too little too late this time around.
Has the Covid-19 pandemic had any hand in the current challenges that are being experienced by dairy farmer?
We thought that it was going to be devastating for us, but demand went up and that caught us by surprise. The reason for that is that consumers understand milk to be a healthy product.
I assume the cost on our inputs has probably gone up because of Covid. We import a lot of our soya bean into this country which is a large part of a cattle diet and I think it has been difficult to get shipped into the country with ports being closed and moving slowly.
Our potential to supply it and the demand on the consumer side has been quite strong.
Lastly here is a question that will likely get you cancelled in this era, but has the vegan buzz at all impact the South African dairy industry?
We consider that opposition I suppose but we feel that our product is much better as far as being good value for money.
We are concerned about it and we do lobby the government with all the legal avenues and opportunities that we have with the department of trade and industry to separate those products.
We do not want dairy being called something else because we feel that they are riding our coattails.
We just must keep pushing that milk has a high value of nourishment and it is relatively cheap. We are sensitive to the cost of our product and farmers would really love to see that consumers do not have to pay one cent more than they have to.