Milk and dairy prices will rise ”a lot” this year amid expected shortages, the Milk Producers’ Organisation (MPO) warned on Thursday.
Prices could go up as much as 20% to 30%, said MPO MD Bertus de Jongh. ”The price increase will likely start in March and heighten in winter.”
De Jongh said low producer prices in the past two years are behind the local shortage of milk.
These have forced as many as 30 dairy farmers a month out of the industry, he said.
Contributing to this are higher meat prices. ”At present it is more profitable to slaughter dairy cows than to milk them,” said De Jongh.
Internationally prices are also on the up because of shortages caused by the drought in Australia and normal cyclical economic conditions.
The weaker rand makes it expensive to import dairy products to supplement milk shortages, said De Jongh.
On Wednesday, Parmalat announced that it will pay Southern Africa Milk Cooperative members 15 cents a litre more from February 1.
Parmalat depends on the cooperative’s dairy farmers for more than 90% of the 400-million litres of milk it needs each year. — Sapa