The world dairy industry is a crisis and faces an uncertain future, says Wallie Roux, Namibian Agricultural Union Manager for Research and Development.
Roux made this comment last week at the Annual General Meeting of the Dairy Producers Association of Namibia (DPAN) explaining how the Russian/Ukraine crisis has resulted in the European dairy industries dumping milk powder and other milk products after a ban was imposed on dairy exports to Russia from 2014 to 2016 due to the crisis.
Roux says the European dairy industries were hit hard by the ban and it is especially cheese exports to Russia that suffered tremendously. “Due to this, the EU average dairy commodity prices dropped sharply from January 2014 to January this year, and then accelerated again. What is of concern is the surge of 23 percent in the exports by the EU of milk powder to various African countries after the EU ended its 30 year quota system in April this year. We definitely don’t want to see a wave of milk powder in Africa,” he notes.
Nigeria imported milk powder of the tune of US$ 1 (N$120 m) million per day in June this year. “This make one wonder about why Africa is a continent of many cattle but little milk,” he observes. Roux explains that feeding constitute some 75 percent of local dairy producers’ input costs, and expresses his concerns about the imports of some 500 000 litres of long-life milk from South African every month. “Namibian producers are basically back to where they were in 2013 before government intervened in the form of import quotas from South Africa. In August 2014, the High Court in Windhoek ordered the abolishment of these quotas with immediate effect, and new negotiations regarding government support will start today ??????? between the dairy producers Association and the Ministry of Industrialisation, Trade and SME Development.”
Roux is also concerned about the local industry going down as the risks of dairy production are very high. He urges communal farmers to get involved on a much higher scale in producing milk. “We must compare apples with apples. Namibia produces 200 million litres of milk per annum and simply cannot compete with South Africa, a country that produces the same volume each and every day. The Namibian dairy industry is not asking for a complete ban of imported milk from South Africa. What they are asking for is the same protection the maize and chicken industries are enjoying,” he concludes.