Namibia Economist (Windhoek)

6 July 2012

Namibia: Milk Producer Price Up

Namibia Diaries has announced that the milk producer price has gone up by 25 cents per litre with effect from 1 July. The producer price will further go up by 22 cents per litre on 01 October resulting in an effective 11% increase in the price of raw milk.

The increase has been necessitated by high feed, fuel and energy costs which were putting pressure on farmers' profitability.

As part of an agreement reached between Namibia Dairies and the Dairy Producers Association of Namibia, as from 01 October, Namibia Dairies will in-source all milk transport operations, and the parties have agreed to move to a farmgate-based pricing structure. This means that Namibia Dairies will now pay for the transport cost as it was previously paid by the farmers.

Chairman of the Dairy Producers Association of Namibia, Kockie Adriaanse, expressed his delight at the new pricing structure. He said: "We are extremely happy with the new structure as the price increase will bring relief to farmers who have seen their profitability under pressure due to high feed, fuel and energy costs".

Although the Namibian farm gate price is significantly higher than South Africa, both parties agreed on a fair price to ensure farmers are sustained, the Namibian economy is supported and local production of hormone and antibiotic-free milk is assured for the future.

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