In a move designed to bolster the Kenyan dairy sector, the New Kenya Co-operative Creameries (KCC) announced a Sh5 per litre increase in the farm-gate price of milk, effective March 1, 2024.

This adjustment elevates the price from Sh45 to Sh50 per litre, aiming to alleviate the financial strain placed on farmers by rising production costs.

"We are cognizant of the operational cost pressures faced by our farmers, particularly regarding animal feed," remarked Nixon Sigey, Managing Director of the state-owned milk processor.

"This price increase is intended to mitigate these challenges and incentivize sustained milk production."

This price revision coincides with positive outlooks for the dairy industry.

As the country prepares for the primary March-April-May rainy season, improved weather conditions are anticipated to contribute to increased milk output.

This optimistic forecast is further reinforced by the consistent rise in milk deliveries to processing facilities witnessed since the latter half of 2023, which effectively counterbalanced the effects of escalating feed costs.

Industry data reveals that December 2023 marked the highest monthly milk deliveries to processors in 29 months, with a staggering 75.68 million litres collected.

This figure signifies the highest formal milk intake since May 2021, surpassing the previous record of 77.33 million litres.

Furthermore, Kenyans maintained their robust demand for milk throughout 2023, with annual consumption reaching a record-breaking 810.76 million litres.

This translates to a 7.33 per cent year-on-year increase compared to 2022's consumption of 755.34 million litres and surpasses the previous record of 801.91 million litres set in 2021.

The combined effect of the farm-gate price increase and the promising production outlook paints an optimistic picture for the Kenyan dairy industry.

This scenario has the potential to translate into increased farmer income, improved milk availability, and continued high consumption levels in the coming months.