Yesterday, the price of half a litre of milk hit an all-time high of Sh. 70. In what has been seen as a windfall for milk processors, the prices of milk have been rising dairy at the supermarkets.
However, there is a huge disconnect as dairy farmers are not reaping the benefits of supplying raw milk while processors cash in hugely.
For instance, farmers under milk cooperative societies are still selling their milk at the Sh. 30 range.
However, processors have blamed the on-going drought for the shortage. On one hand, they say that the cost of dairy feeds has gone up, forcing farmers to increase their raw milk prices.
“Supply of raw milk fell during the first quarter of the year on depressed rainfall following the drought that hit key raw milk sheds across the country,” John Gethi, Brookside’s director of milk procurement, told a local daily, adding that Brookside is currently paying Sh. 42 per litre to farmers.
A litre is currently selling at Sh. 140! This, though, is not the generally the case.
When the 500ml packet was selling at Sh. 57, Tuskys Supermarkets CEO Githua attempted to explain how milk payments are divided. “From the Sh. 57 for a 500ml packet, the farmer gets an average Sh. 18, the processor Sh. 36 and retailers get Sh. 3.”
Milk processors have further cited high processing costs and expensive packaging material as among reasons companies claim are behind the eventual retail prices.