STATUS OF

THE KENYAN DAIRY INDUSTRY

Presented during ESADA’s Breakfast Meeting,on 13th Aug 2014,

By,Machira Gichohi,

MD, KENYA DAIRY BOARD.

MILK PRODUCTION Dairy cattle population in 2012 – 4.2million heads

(MOAL&F, 2012) Production estimated at 5billion litresProduction has currently gone down due to;

a) Cold weatherb) Inadequate rains during the long rain season (Mar to Jul)c) Competition for land between livestock and crops (esp. in the Rift

Valley) d) Delayed prices by some processors – has mainly affected intakes in

the formal sector

MILK PROCESSINGIncreased investment in milk processing – current

capacity has increased from 2.9million to over 3.5 million litres par day

The number of milk processing companies are going down due to;a) Insolvency b) Mergers and acquisitions

Dropping milk intakes since beginning of the year

MILK PROCESSING CONT’

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000 Milk Intakes (Litres)

MILK PROCESSING CONT’

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000 Milk Intakes (Litres))

2011 2012 2013 2014

MILK PRICES

Producer prices continue to be volatile Average national prices per litre for the last 3

months (KDB, 2014)a) April – 31.75/= b) May – 32.2/= c) Jun – 32.9/=

Cost of production continue to be high (the Board is planning for a study to establish the costs of producing milk in Kenya)

MILK PRICES CONT’ Consumer prices continue to increase (KNBS, 2014)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -

20.00 40.00 60.00 80.00

100.00 120.00 140.00

Prices of pasteurized milk (Shillings per litre)

2013 2014

DAIRY EXPORTS Major export products are UHT milk, milk powder, butter

and ice cream Major export destinations are Tanzania (leading),

Uganda, Southern Sudan, Rwanda, DRC, Malawi and Somalia among others

Fluctuations in dairy exports have been observed. This is caused by;a) Fluctuations in milk production b) Competition in the export marketsc) Increasing production in the neighboring countries – form

the largest of our export market d) Political instability (2008)

DAIRY EXPORTS

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000 Dairy exports in KSh

MILK QUALITY Majority of the dairy standards harmonized in the

EAC GMP standard developed to facilitate compliance by

milk handling and processing enterprises Regular surveillance on quality and safety undertaken

by KDB, KEBS and other stakeholders

MILK QUALITY The major non compliances observed by KDB

include;

Stage in the value chain Major non compliancesRaw milk (sampled from transporters, collection centres and milk bars)

• High Total Viable Count (TVC)• High Coliform Counts(CC)

Finished milk products (samples from large, medium and small-scale processors)

• High Total Viable Counts (TVC) • High Coliform counts (CC)• Yeats and Molds (especially in

some fermented products)

KEY CHALLENGES Seasonality of productionLow productivity High cost of milk productionHigh cost of milk processingInformal milk marketing Competition in the local and export marketsPoor infrastructure – roads, utilities, network of

coolers etc.

NEXT STEPS TO DRIVE THE DAIRY INDUSTRY

Include the following among others; Promote organization of producers/bulking and cooling of milk Promote milk processing and value addition Improve productivity and manage costs Enhance milk quality, safety and traceability School Milk Program Strategic Food Reserve Guaranteed minimum producer prices Automation of dairy enterprises Improve infrastructure

Thank you