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Dairy shortage expected

Cape Town - Dairy farmers are feeling sour about the situation in their industry where processors say they expect shortages of certain dairy products, while farmers are being inadequately compensated for their wares.

A letter from one of Parmalat's staff members to retailers during the past week cause a flutter among dairy farmers in the Western Cape when it was revealed that the company was struggling to produce sufficient supplies of yoghurt and cheese, and that it had had to use up more of its reserve stocks than anticipated.

Farmers say they suspect the problem is worse than admitted to, because all of the storage space at Robertson, which is generally used by Parmalat for its reserve stocks, is believed to be standing empty.

But what really angers them is the fact that earlier this year they were told there was a milk surplus, and that higher prices were therefore not viable.

Drought, higher input costs and low prices have squeezed many farmers financially, and they have be forced to sell dairy cattle for slaughter in order to pay their bills.

The farmers are also concerned that the shortages could lead to the importation of dairy products, which would be a further blow to the embattled domestic industry.

There seems to be an oversupply of cheap Chinese cheese, in particular, on the international markets as the Chinese no longer trust their own cheese following the melamine problems a while ago.

Consumers are advised to make sure that foreign cheese appearing on supermarket shelves is indeed safe.

Meanwhile Alton Dudley, Parmalat's supply chain executive, says that last year's market conditions led to the surplus at the beginning of the year.

He explains there was a higher than expected demand for several of their products over the first three months of the year, which is why stock levels are currently down.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

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