Stagnation in South Africa’s Dairy Industry Sparks Farmer Concerns

According to Milk Producers Organisation's bulletin on 14 October, the primary dairy industry in South Africa is stagnating as measured by the demand for unprocessed milk. Milk processors expand their products with less dairy by defrauding the taste and nutritional value, which could permanently displace real dairy consumption. The total cumulative demand for milk, consisting of locally produced milk less net exports (total exports inclusive of sales to BLNS countries less total imports) for the first 8 months of 2022 is 4.4% less YoY and 7.8% lower than in 2020. Since 2019, the demand for unprocessed milk has remained stagnant at 3.4M MT annually and may even drop below 3.4M MT in 2022. The market seems unconcerned with this phenomenon and that supply is in balance with demand for the different years analysed. Dairy farmers must decide whether it is worthwhile to invest limited production resources into a stagnating industry.