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Low milk producer prices worrying
The Milk Producers' Organisation (MPO) has expressed concern regarding producer prices for milk which have not yet increased this season. International producer prices increased significantly over the past three months and import parity is R4 and above for most products.
Unusual seasonal circumstances are currently also affecting milk production negatively. Winter conditions were experienced late this year, which could result in the winter season continuing later and longer. Producers in previously drought stricken areas are struggling to keep afloat and recover from the financial impact of the drought. This has resulted in many milk producers converting to other disciplines, which will have a negative impact on milk supply in future.
According to Bertus de Jongh, managing director of the MPO, a number of responsible milk buyers with a long term vision have already increased producer prices in order to ensure sufficient milk production over the next 18 months. If the upwards trend in global prices continues, imports could become unaffordable in the foreseeable future, which will impact on the future supply situation.
De Jongh appealed to the role players in the industry to act responsibly in the interest of the long term sustainability of the industry.
