Local dairy industry running dry

IT is expected that Namibian milk producers will only produce 16 million litres of milk this year.

Consumption, however, hovers around 38 million litres.

This gap is expected to be filled by imports, which have irked local producers. Some have even called it quits, meaning the industry now only has 12 out of a previous 45 producers left.

According to the Dairy Producers’ Association (DPA) the main factors suffocating local producers are cheap imports, increased feeding costs for cattle, droughts and poor economic conditions.

In 2018, raw milk production for the year stood at about 24 million litres. This figure dropped to 21 million litres in 2019. The expected production estimate for 2020 is only 16,7 million litres.

The figures above and concerns were raised at the DPAs annual member meeting in Windhoek last week.

The Namibia Agricultural Union says the crisis is out of control.

Serious intervention is needed, the union said.

The union said Covid-19 and the associated closure of Namibian Breweries caused a further significant reduction in production because brewers’ grain, a by-product derived from beer, used as the primary source of feed for the dairy cows, was not available for a couple of weeks.

They said role players were eager to work together on measures to sustain the industry effectively.

One such initiative is a cost-saving measure on feed. Claudia Mack from Feedmaster works with producers to develop a tailor-made package for them.

The packages have different dairy concentrate options, giving producers the opportunity to add their choice of by-products.

Further measures include government support, which the union said should come in the form of a milk subsidy to cover increased feed costs, as well as stimulating reinvestment to increase local raw milk volumes.

The acceleration of the bill on the control and import of dairy products, as well as the formulation and finalisation of the regulations to implement the bill is also essential.

Local milk producers can increase their production to 20,3 million litres from their current production level of 16 million litres if the country better facilitates access to the market.

With minimal competition from cheap external imports, they would be able to scale up and generate around N$800 million in revenue.

– bottomline@namibian.com.na