The New Kenya Cooperative Creameries has announced an increment in milk prices from Sh36 per liter to between Sh38 and Sh40 as it seeks to enhance its market share nationally to 40 per cent and benefit over 160,000 smallholder farmers.
In this, the milk processor is set to increase milk sales from farmers in the country from Sh4.5bn to Sh6bn following the upgrade of its plants in Dandora, Sotik, Eldoret and Uasin Gishu at a cost of one billion shillings.
According to data from the Kenya Dairy Board, the state owned dairy processor has increased its share in the market from 23 per cent to 35 per cent since 2016 after upgrading of factories in Eldoret and Dandora.
The New KCC is upgrading the Sotik factory at a cost of Sh200m and this will enable it increase the factory’s processing capacity from the current 60,000 liters to 100,000 liters of raw milk per day.
In this, dairy farmers in the region are set to see upturn in their income from Sh850m to about 1.5bn in a year according to data from the processor.
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Farmers delivering milk to a factory. Photo: courtesy
The factory’s equipment was last upgraded 36 years ago in 1982 with farmers from Kericho, Nyamira, Kuresoi, Nakuru and Bomet delivering their milk to the plant.
The quantity of milk delivered to dairy processors recorded a significant drop of 17.4 per cent from 648.2m liters in 2016 to 535.7m liters in 2017 according to the Economic Survey 2018.
Similarly, the quantity of processed milk and cream from processing plants decreased by 8.5 per cent and that of butter and ghee declined by 22 per cent
Production of cheese however, increased from 311.2 tonnes in 2016 to 338.3 tonnes in 2017.
The dairy sector in the country accounts for 14 per cent of the total agricultural GDP and six to eight per cent of the country’s total GDP.
According to the United States Agency for International Development (USAID), the dairy industry employs one million people at the farm level, 500,000 directly and 750,000 in support services.