Wedoany.com Report-Mar 18, South Africa’s dairy industry is likely to grow in the future because of “improving economic factors” latest research suggests.
Although South Africa has suffered from repeated weather and disease-related issues in last five years, current indications, according to the report compiled by the US Department of Agriculture (USDA), point to an increase in demand both on the domestic front and from potential trade partners.
According to the USDA report the number of dairy farmers in South Africa has fallen by 60% in the past decade.
It highlights that producers have been under pressure from “low prices received from processors” and competition with imports of ultra-high temperature (UHT) milk.
“Because small herds lacked the economy of scale necessary to remain profitable, many small operations have sold to larger-scale producers”, the USDA Foreign Agricultural Service report outlined.
South Africa
The South African commercial dairy herd is estimated at 1.27 million head and are predominantly Holstein and Jersey.
The USDA report highlights that due to a combination of “price pressure and unfavourable feed and climatic trends” over the past decade, per cow productivity has fallen and the dairy industry in South Africa has undergone significant consolidation.
South Africa’s average milk production per cow per day stood at 16.1 liters – 4.3 gallons – in 2023, down from from 21 liters – 5.5 gallons – in 2018 due to “heat stress, escalating production costs, and exit of farmers out of the industry”.
“A foot-and-mouth disease (FMD) outbreak also affected dairy cattle in 2024. However, with improving conditions, milk production is forecast to increase in 2025,” the report outlined.
Two of the reasons why the outlook for the country’s dairy industry is improving is because dairy processing trends shift with consumer disposable income and inflation – both of which are starting to improve in South Africa.
According to the USDA report demand is also expected to increase for processed products for export to China following a new trade protocol.
