Is Dairy Farming Profitable in South Africa?
Although the dairy industry might be challenging to work in, if all input costs are well managed, it is possible to run a profitable business in South Africa.
South Africa’s dairy industry’s state
According to Barbara Bieldt, market development and compliance service manager for the Milk Producers Organisation (MPO), despite its difficulties, dairy is still the fourth-largest agricultural sector in the nation.
The three provinces are said to produce almost 75% of the nation’s milk, according to a 2012 report by the South African Department of Agriculture, Forestry, and Fisheries.
According to Milk South Africa’s April 2021 LactoData report, South Africa had the second-largest average herd size in the world in 2018, with an average herd of 459 cows producing a daily average of 44.11 pounds, or 18.65 liters, of milk.
Is Dairy Farming Profitable
Almost 30 producers leave the dairy business in South Africa each month as a result of poor profitability brought on by high input costs and low producer prices. Even dairy cows are being butchered by producers because meat is becoming more profitable than milk. But according to a survey conducted by David Beca, general director of Red Sky, South Africa’s dairy profitability compares favorably with that of Reasons for low profitability
Because of this, South African farmers typically make more money than their counterparts in Australia and New Zealand despite having higher production costs. Farmers should still look for methods to cut costs, despite this. interest rates are greater in SA.The South African economy, and consequently South African dairy production, is linked to higher risk in Australia and New Zealand. The danger associated with the climate is also higher in SA.
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How much money do farmers in South Africa receive for milk?
Customers prefer milk offered in two-liter jugs, which retail for about R25 (€1.74) at stores. The milk is purchased from the farmer, who also serves as the processor, for R10 (€0.70) per litre, while his cost of production is R4 (€0.28) per litre.
Where do dairy farms predominate in South Africa?
The majority of the nation’s milk production currently takes place in the Western Cape province. More than 80% of South Africa is said to be dry to semi-arid, with an inconsistent rain. Intensive agricultural production practices, such as dairy farming, are therefore inappropriate for the majority of the country.
