Brookside milk processor has announced a 17 per cent increase in producer prices, beginning September 1.
The move by Brookside Dairy is expected to benefit both dairy co-operatives groups and smallholder farmers contracted to the processor. The move comes after disruptions in the value chain occasioned by the Covid-19 pandemic, which has depressed production.
John Gethi, Brookside’s director of milk procurement and manufacturing, said the new rates were a reaction to the prevailing market conditions in the value chain.
“The price review has been necessitated by a change in the prevailing market conditions,” Gethi said in a statement sent on Monday.
He said the new price is a major incentive to dairy co-operatives, who now have an opportunity to earn up to Sh 42 per litre for deliveries of chilled raw milk to the processor’s Ruiru factory. This is an increase from the current price of Sh 36 per litre of milk at the farm gate.
“The new price will benefit over 160,000 farmers across the country, who deliver to Brookside either through co-operatives or as individuals. The rising farm gate price is also a welcome relief to farmers hit by the effects of the Coronavirus pandemic, which has seen a drop in supplies made to processors, thereby reducing incomes of smallholder farmers,” Gethi said.
Data from industry regulator the Kenya Dairy Board indicate there has been a drop of up to 36 per cent in milk deliveries from farmers between the months of March and June this year.
According to KDB, milk production was at 63 million litres per month in January, but it has since dropped to 42 million litres per month.
“Farmers should also take advantage of this price incentive to improve the management of their dairy herds, including vaccinating the animals against the deadly Foot and Mouth Disease and Lumpy Skin Disease, among others,” Gethi added.
“We are calling on our farmers to use the additional income for enhanced feeding of their animals. They also need to prioritize the ever important overall health of their animals for increased production. Farmers need to invest in farm-grown fodder, which can be conserved for use during seasons of depressed rainfall,” he added.
This is the third time this year that Brookside has adjusted raw milk supply prices for its farmers as it seeks to further increase its share of marketed brands, on the back of rising demand for dairy products.
processor, which has an installed daily processing capacity of over 1.5 million litres, has the largest raw milk collection footprint in the country, with more than 80 cooling centres spread across several counties in major milk production sheds.
“Our promise is the guaranteed payment for the all the raw milk supplied to us, whilst procuring 100 per cent of all contract volumes from our suppliers, in both difficult and good times,” Gethi said.