Zimbabwe’s raw milk producers are feeling the pinch of low prices which have plummeted by more than half, resulting in them struggling to keep the sub-sector sustainable and profitable, Business Times can report.
A litre of unprocessed milk used to fetch US$0.65, according to official data obtained from the Zimbabwe Commercial Farmers Union (ZCFU).
But, the farmers are now getting US$0.30 a litre, reflecting a 53% plunge in producer earnings.
ZCFU president Shadreck Makombe told Business Times that the situation was dire as the producers have been hit hard by the low prices.
Consequently, Makombe said some producers were now selling their cows and others were shutting down operations as it was no longer viable for them to continue in operation.
This means, Zimbabwe should brace for serious milk shortages.
“The thinking is that the economy is slowly dollarising but milk prices have remained very low and are lagging behind. Farmers are milking, but they cannot buy enough feed with the meagre pay-outs they are getting and so milk production stagnated or declined because of the reduced income,” Makombe said.
“Since January 2021 prices for labour, electricity and feed have gone up but the milk prices are yet to be significantly reviewed.”
He added: “The exchange rate as well has changed yet milk prices to the producer have moved by very little margins for example, every input including the government veterinary fees published in the last few months has gone up by between 250-1500% but the milk price has (gone down instead).”
Since 2009, milk production in the country was on a steady increase, but factors such as shortage of water and stock, successive dry spells which have characterised Zimbabwe over the past few years have negatively impacted production.
Some analysts believed that the Covid-19 lockdown measures worsened the situation since the producers haven’t been able to import powdered milk supplies needed in the production processes from South Africa.
Last year, Zimbabwe’s annual raw milk production fell 4 % to 76.6m litres in 2020 from 79.6 litres produced in the previous year, largely due to a plethora of challenges including high production costs, according to a Ministry of Lands, Agriculture, Fisheries Water and Rural Resettlement report.
Milk production in the country has been declining due to successive droughts that stifled the dairy sector in the past few years.
The downward trend appears to be continuing this year.
Others, however, suspect that some milk producers were creating an artificial shortage by holding on to their milk so as to get the government to allow processed milk and powdered milk from South Africa to be imported duty free.