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Also find the “Dairy processing” chapter in the Adding Value section.
- South Africa’s dairy industry compares favourably with the world’s top dairy industries in farming methods and processing of dairy products.
- Dairy farming occurs throughout South Africa with the highest concentration being in the Western Cape, Eastern Cape and KwaZulu-Natal (MPO, 2017).
- Holstein Friesians and Jerseys are the predominant breeds, followed by Ayrshires, Guernseys, SA Dairy Swiss and Dairy Shorthorn.
- The number of milk producers in South Africa in 2016 was 1 593, employing more than 30 000 workers and milking some 671 000 cows (MPO, 2017).
- Processors and distributors of milk and milk products process milk from the farmers and sell it to consumers nationwide.
- Internationally the South African farmer still produces milk at one of the lowest prices in the world.
- The dairy industry in South Africa operates under free market principles. Subsidised dairy imports from European countries and the USA put enormous pressure on local producers.
- Africa is responsible for only 1% of the world’s dairy output, and half of that comes from South Africa.
2. International business environment
Websites which will help you:
- www.fil-idf.org, website of the International Dairy Federation provides global dairy statistics.
- A sister websites, www.dairy-sustainability-initiative.org provides “a global framework for a holistic approach to sustainability in the dairy value chain”.
- Find the current world production, market and trade reports at www.fas.usda.gov/commodities/dairy.
- The annual Lacto Data from the Milk Producers’ Organisation (MPO) provides useful perspectives on the global dairy situation. Find these at www.mpo.co.za. The 2017 one is here.
- The monthly Dairy Market Trends provides the latest statistics on the dairy industry, including breakdowns of imports and exports. Find it on www.mpo.co.za. The Quarterly Review, prepared by the MPO and SAMPRO (see heading 7), does the same. Find it at www.milksa.co.za.
- The Bureau for Food and Agricultural Policy (BFAP)’s annual Baseline analyses the domestic outlook in context of what is happening globally. Find the document at www.bfap.co.za.
3. Local business environment
Dairy producers have a number of marketing opportunities:
- Sell direct to consumers. Producers can build a sound relationship with local customers.
- Sell to a retailer e.g. a small café or supermarket
- Sell to a processor.
- Value adding through processing (see the “Dairy processing” chapter in the Value Add section of this website)
- Value adding through packaging. Put milk or other product in attractive and functional packaging (see the “Packaging & handling systems” chapter in the Farm infrastructure section of this website).
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