South Africa's dairy sector is expected to grow despite challenges
Source: dairynews.today
South Africa's dairy sector is expected to grow despite challenges, driven by improving economic conditions and new trade opportunities.
South Africa’s dairy industry is anticipated to see growth with "improving economic factors," according to recent research by the US Department of Agriculture (USDA). The country has faced repeated weather and disease hurdles over the past five years, but signs now point to rising demand domestically and from trade partners.
Despite a worrying 60% drop in the number of dairy farmers over the past decade due to "low prices received from processors" and competition from imported ultra-high temperature (UHT) milk, the sector is poised for recovery. Many small-scale operations have been absorbed by larger producers, enabling a shift towards scalability.
South Africa's average milk production per cow per day has decreased from 21 liters in 2018 to 16.1 liters in 2023, driven by "heat stress, escalating production costs, and exit of farmers out of the industry."
However, the $1.27 million commercial dairy herd, primarily Holsteins and Jerseys, remains a significant asset.
Challenges such as record-high corn prices and a foot-and-mouth disease (FMD) outbreak in 2024 have impacted productivity, yet milk production is forecasted to increase by 2025 as conditions improve.
The industry's prospects are also bolstered by an increase in consumer disposable income and inflation stabilization. Furthermore, a new trade protocol is set to boost demand for processed dairy products exported to China, portraying an optimistic outlook for South Africa's dairy future.
Despite a worrying 60% drop in the number of dairy farmers over the past decade due to "low prices received from processors" and competition from imported ultra-high temperature (UHT) milk, the sector is poised for recovery. Many small-scale operations have been absorbed by larger producers, enabling a shift towards scalability.
South Africa's average milk production per cow per day has decreased from 21 liters in 2018 to 16.1 liters in 2023, driven by "heat stress, escalating production costs, and exit of farmers out of the industry."
However, the $1.27 million commercial dairy herd, primarily Holsteins and Jerseys, remains a significant asset.
Challenges such as record-high corn prices and a foot-and-mouth disease (FMD) outbreak in 2024 have impacted productivity, yet milk production is forecasted to increase by 2025 as conditions improve.
The industry's prospects are also bolstered by an increase in consumer disposable income and inflation stabilization. Furthermore, a new trade protocol is set to boost demand for processed dairy products exported to China, portraying an optimistic outlook for South Africa's dairy future.
