Supporting local is critical for the economy’s recovery and development

The South African dairy industry is a part of the country’s agriculture sector we can truly be proud of – employing thousands of workers and bringing the best quality fresh milk to local households.

Dawie Maree, head of information and marketing at FNB Agriculture, says that the Department of Agriculture, Land Reform and Rural Development (DALRRD) did a study in 2017 which showed that 60 000 labourers work in the dairy industry, and a further 40 000 in the rest of the value chain who are producing, transporting and selling dairy products.

Ian van Niekerk from Oakland Dairy adds that, in contrast to other agriculture sectors, dairy farming needs labour seven days a week. “It’s also not seasonal labour, but due to the nature of dairy farming, it requires continued labour so this means that dairy farming makes a constant contribution to the labour market in South Africa.”

According to Maree, figures from the DALRRD shows that the gross value of fresh milk production is around R17,8 billion per annum. This is 12% of the livestock sector’s gross value of production (GVP) and 6% of the total agriculture’s GVP. “It’s not the biggest, but certainly one of the most important sectors of South Africa’s agriculture industry. It can also be seen as a ‘cash crop’ because the cashflow and turnaround is quite fast.”

A further indicator of the importance of the dairy industry, is the fact that South Africa exports dairy products to neighbouring countries such as Botswana, Lesotho, Namibia and Swaziland collectively known as BLNS countries. “Some SA supermarkets have a footprint in these countries, and there is certainly potential for growth in the export market. It’s important to keep in mind that milk is actually a very affordable source of protein and can easily be used in a feeding scheme for school children, especially in poverty-stricken communities.”

In terms of the export market, a big positive is that a recent report by the Milk Producers Organisation (MPO) indicated that exports for the first nine months of 2020 is higher than any of the previous five years. Net exports for the first nine months of 2020 equal 52 million litres. “This is a feather in the cap of the dairy value chain and affected government departments – the route to market was maintained despite the lockdown in South Africa and in our trading partners.” This is an indication, says the MPO, that export markets are well looked after by the SA exporters and that the markets are satisfied with the product range and quality.

The future clearly holds massive potential for dairy farms in South Africa, although Maree feels that there probably won’t be a lot of new farmers starting from scratch in this industry. “It requires a lot of capital to start up as a dairy farmer – to buy the livestock and maintain them is certainly not cheap. But, I do feel that the current industry and farms will grow in productivity and effectiveness.”

Interestingly, Van Niekerk says that smaller dairy farms are disappearing, but big farms are getting even bigger and turning into mega dairy producers. “A mega farm is any farmer milking more than 1000 cows per day, and producing upward of 35 000 litres of milk daily. It is easier for the big milk farms to manage the science behind dairy farming, for example, the breed of cow and what they are fed have a massive impact on the quantity and quality of milk that is produced. Dairy cows are also very sensitive to changes in their environment, and it’s not a good idea to move them to farms in different provinces. We’ve seen milk production drop by as much as 15% on a very hot day in the Western Cape, simply because the cows are not used to such temperatures.”

In spite of the challenges faced by dairy farmers, dairy retail sales are doing exceptionally well given the many negative factors at play in the South African economy and the financial position of consumers (MPO Dairy Market Trends, October 2020). The Covid-19 pandemic has taught us to appreciate what we have and to support local enterprises. Consumers can raise a glass of the freshest South African milk, knowing that they are part of a continuously growing value chain supporting thousands of families.

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