Dairy industry not out of the woods yet
Good rains have boosted local fodder production, but that has not provided much relief to embattled dairy farmers yet.
24 February 2021 | Agriculture
The dairy industry has been one of the sectors battling to survive, with production decreasing and the price-cost squeeze harming productivity.
According to the NAU, local raw milk production dropped from 21.8 million litres in 2019 to 17.2 million litres, demonstrating a 21.1% decline.
The drought also resulted in low dam levels and a significant decline in fodder production at Hardap, where close to 80% of raw milk is produced.
“Subsequently, there is a reduction in raw milk production. Some dairy producers ceased production that contributed to a reduced amount of raw milk, especially in 2020.”
The NAU milk production cost index indicates that total expenses decreased by 10.4% year-on-year.
The union says the decrease in total expenditure was brought about by a decline in fodder and fuel prices in 2020, as opposed to the same products' prices in 2019. There have not been much or any significant changes to the raw milk price.
“Moreover, there has been an increase in fodder production due to the rain. A large supply of fodder often leads to a drop in the price of the input.”
However, the heavy rains led to late harvesting and a relative decline in the quality of fodder.
Producers might have to add other inputs to improve the quality of feed, which could lead to an increase in feed costs. “Dairy producers are not out of the woods yet, and support is highly required,” the union says.