Fin24

Low milk prices forcing producers out

2011-07-04 15:28

Johannesburg  - The Overberg Dairy Action Group said on Monday that 21 milk producers have left the industry in the past six months.

"Not only were these producers affected financially, but a large number of farm workers have also lost their jobs," it said.

The group said it has been told a further 12 producers would be forced to leave the industry in the next three months, should producer prices not be sufficiently increased.

"Producer prices in SA are currently at least 7% lower than a year ago. Internationally, producer prices have already been adjusted to align with global dairy prices.

"However, the South African milk producer currently experiences stagnant producer prices, while input prices have increased sharply since 2010. Import parity is currently in the region of R4/litre, while the average producer price locally is about R2.80/litre."

The group added that producers had voiced their dissatisfaction over price mechanisms which, they claimed, negatively affect milk producers in the Overberg region in the Western Cape, while producers in other regions benefit from it.

"This 'take it, or leave it' approach will lead to some of the best quality milk in the country being lost to the consumer.

"The discontinuance of milk production in the Overberg region will put further pressure on the environment, in that milk buyers will have to transport their raw material over long distances to processing plants."

The group said new structured business units at producer level were planned to address imbalances in the value chain.

Comments
  • abhk101 - 2011-07-04 16:01

    No shock here – Gov. won’t even blink about the knock on effect of 'voters' losing their jobs. Milk for thought: Farm gets R2.8 per litre of milk from Clover, Clover then goes pasteurise the milk (aka bring to 80DegC) then to cool the milk really fast they add ICE (up to 30% of the original volume). As well as remove 80% of all cream for butter, cheese etc. So the 1 litre of FULL cream milk the public buys for R7.00 has been diluted and robbed of butter fat to 0.68 Litre of the original with a 60% profit for Clover (not counting the profit from butter etc.!

  • Stryder - 2011-07-04 16:18

    If others are selling it cheaper then you are doing something wrong and should improve your productivity or leave the market.

  • Judith - 2011-07-04 16:34

    The way farmers are treated amounts to them being penalised for good productivity. If prices are not fair, we will lose food security and have to rely increasingly on imports, which we can't afford.

  • Carl Muller - 2011-07-04 18:59

    We do not see these drop in prices when we pay.....

  • R Albert - 2011-07-04 19:33

    Blame the ANC for its absurd Competition Policies - Production was far more efficient under the previous government that at least understood industry.

  • Liberty - 2011-07-04 20:21

    Milk prices in the supermarkets has climbed quite a bit over the last month or so in supermarkets in the Cape. If the producers aren't making any money it must be the supermarkets ripping us off. Can't find a 2l bottle of milk for under R14

  • michael.moolman.7 - 2012-07-20 19:17

    "Producer prices in SA are currently at least 7% lower than a year ago..." Why am I paying more for milk today compared to last year?

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