The fight for control of the raw milk market is expected to intensify after leading industry player Brookside announced it would pay its farmers another Sh5 more for every kilo delivered.
Brookside Dairy
Brookside’s latest price hike comes less than a month after it effected a similar Sh5 per kilo increase in what analysts see as an inevitable reaction by processors following depressed supplies arising from erratic weather, characterised by an unusually cold August in the country’s major milk sheds.
John Gethi, the processor’s General Manager in charge of milk procurement and extension services, said the company would now pay a high of Sh40 for each kilo delivered, up from Sh35. The new rate makes Brooksidethe highest paying milk processor in Kenya.
“We call on our farmers to redouble their effort in milk production in order to further benefit from this opportunity with the new price adjustment,” Gethi said in a statement, adding that the new price regime would be effective from today (September 1).
Brookside’s latest move could prompt the other processors to review their producer prices in order to ward off Brookside’s assault at the farm-gates.
But Gethi sought to explain that the new increase is “a show of commitment by the company to the welfare of its farmers.” The processor, with a daily raw milk intake of nearly 600,000 kilos, is expected to begin test runs of its dry milk complex by year-end.
The milk powder plant is expected to further increase the company’s demand for raw milk. “Our continual review of producer prices is based on a multiplicity of forces in the market,” Gethi wrote.
“Brookside shall continue to provide a reliable and assured market for raw milk, together with regular payments for deliveries made, at the most competitive prices in the region,” Gethi added. Last week, shelf prices of milk hit an all-time high, with some outlets selling the 500ml pouch at Sh55.
