Many agricultural commodities in the country are facing a downward spiral because of the never-ending challenges they are facing such as load shedding, dilapidated ports, and increasing operational costs. Sadly, milk producers have their own unique problems.
Tip-Top Milk chief executive David de Jager said on top of the drowning economic climate faced by milk producers in South Africa milk dumping has become another headache that the farmers have to deal with.
An unstable future
De Jager said approximately 30 million litres of milk have been dumped in the country causing a volatile and unstable dairy industry which was not sustainable for any farmer or their livelihoods.
“Such actions are potentially detrimental to the sustainability of the country’s already dwindling number of dairy farms and the livelihood of the thousands of people employed on these farms.
“These cheaper raw milk alternatives have placed increased financial pressure on farmers, their employees, and the future of the industry,” he said.
According to De Jager, cheaper imports from other countries are undermining the local market as well as the stability of the already precarious dairy industry.
Farmgate milk prices
“The surge in cheaper imported milk will put pressure on farmgate milk prices and negatively influence milk supply in the 2024 dairy season, triggering a chain reaction that threatens the stability of the entire local dairy sector.
“The impact of the import has already contributed to creating a distressing situation in the Eastern Cape where the farmgate milk price has dropped significantly,” De Jager said.
He said the influx of cheaper imported milk will force farmers to consider drastic measures to make ends meet including reducing feed, and wages, resulting in job losses across the industry.
“The dairy industry is the backbone of many communities in the country, where there are few employment opportunities outside of the sector.
“Importing cheaper milk directly threatens the jobs and many more livelihoods that depend on the industry, potentially causing a local agricultural sector, that should be thriving and expanding, to shrink,” he said.
Importing is not sustainable
According to the Milk Producers Organisation, the dairy industry employs approximately 14 230 people, many of whom are the only source of income in families, and the gross value of fresh milk production is around R19.1 billion to the economy annually.
“Instead of exerting pressure on milk prices now, we ask that retailers help to stabilise farmgate prices. There is no need to import dairy products, our own farmers, if given the opportunity, are more than able to meet the demand.
“The consequences of failing to address this issue are dire. If retailers do not act now, farmers will be burdened by immense financial strain, putting their ability to sustain operations and support countless local livelihoods in jeopardy,” he said.
Stakeholders must come to the party
De Jager said it was not easy to farm in South Africa because of the many contributing factors that are faced by farmers, however, to ensure that the country avoids job shedding, all relevant stakeholders need to come to the table.
“Farmers must also understand their role in the chain. As much as they can supply enough milk to meet the demand, they must guard against over-supply of raw milk during spring when it is much cheaper to milk and under-supply in autumn,” he said.
We will not survive
Nompe Zim, a dairy farmer in the Free State, has questioned retailers that import a product like milk which is in abundance in the country.
“It is difficult for our products as local farmers to put them on the shelves of big retailers, the criteria that is being used makes it difficult for us as farmers to find our products in the markets that we wish to see them in.
“On top of the production costs having skyrocketed in the economy that is struggling which as local farmers are operating on, the imported milk is being prioritised over us at a cheaper price, leading to the consumer preferring such milk over ours,” she said.
Zim said she understood why consumers will prefer the cheaper version of the milk which is mostly imported because in the time where many things are expensive, it is not the matter of preferences but rather affordability.
“At the current moment people who produce milk in the country are few, this should be an ideal moment for the government to empower the existing farmers and empower them, because on top of those operational costs that are high, the is climate change that needs to be taken into consideration by farmers and how we navigate it.
“It is going to be very difficult for us as milk producers to survive, because at the end of the day it is about what the consumer need, if we sell a litre of milk at R15, an imported milk will be R10, leading to us as local farmers losing,” she said.
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