• Last year, the country recorded a 49 per cent increase on the value of dairy produce exports, which hit a record Sh7.3 billion.
• The country has a daily processing capacity of five million litres per day.
Kenya is keen to attract new investors in milk processing as the country sets ground on becoming a net exporter in the medium-term, amid a drive to further increase production.
The country last year recorded an annual production of 4.6 billion litres, latest data by the Kenya Dairy Board (KDB) show, with favorable weather witnessed this year expected to drive the volumes higher in 2024.
Last year, the country recorded a 49 per cent increase on the value of dairy produce exports, which hit a record Sh7.3 billion, up from Sh4.9 billion the previous year and Sh568.9 million in 2021.
In an exclusive interview with the Star, KDB managing director and CEO Margaret Kibogy said the country is targeting the Middle East for its exports with Dubai as the hub, even as it continues to strengthen existing markets which include Tanzania, Uganda, South Sudan, China, and Somalia.
This is on the back of increasing value addition (butter, ghee and cheese) which went up to 1,072 tonnes last year from 835.2 tonnes the previous year.
The country also recorded an increase in volume of formally marketed milk to 810 million litres from 755 million litres, with the value going up to Sh40.45 billion from Sh35.7 billion.
Establishment of cooperatives at war level increased to 770 from 689 as farmers continue to enjoy stable prices currently averaging at Sh47.6 per litre.
“We are glad the sector is really growing.Farmers in organised co-operatives enjoy economies of scale. we are putting in the right structures to increase production and product diversification as we target growth in exports,” Kibogy said.
The dairy subsector contributes about four per cent to the country’s Gross Domestic Product and supports more than 1.8 million smallholder farmers.
Kenya is among the highest dairy industry players with a high per capita consumption relative to other regional countries.
In addition to supporting livelihoods, the sector is a key contributor to food security and nutrition where milk provides more than 7.3 per cent of the carolific supply and ranks fourth after cereals, pulses and sugar and sweeteners.
The country has a daily processing capacity of five million litres per day.
The government has put in place measures to increase annual milk production to about 11 billion litres by 2027.
To grow production and increase supply to processors, KDB is working with industry players and farmers to improve output from the small-scale level to major ranchers.
The Kenya Dairy Industry Sustainability Roadmap 2023-2032 proposes to increase production through accelerated commercialisation.
If the Roadmap is implemented successfully, projections indicate the country could achieve self-sufficient by 2026.
“The country would thereafter become a net exporter of milk with exports rising to 586 million by the year 2033,” Kibogy affirmed as the board leads the drive.
According to Statista, the milk market is expected to grow annually by 7.66 per cent (compound annual growth rate 2024-2029).
Currently, most revenue in the industry is generated in India-$71bn in 2024 (Sh Sh10.2 trillion).
President William Ruto’s Bottom Up Economic Transformation Agenda (BETA) plan for 2022–2027 identified dairy in the agriculture sector as one of the key value chains for transformation, given its massive potential to impact on the socioeconomic welfare of the country and millions of smallholder farmers.
The government through KDB and other stakeholders, has put in place interventions to support farmers on fodder production which includes large scale production for economies of scale.
Farmer centric interventions are expected to increase productivity and production of milk while enhancing the profitability, resilience and sustainability of dairy farming.
“This will impact on other upstream activities with more milk available for processing, value addition and marketing,” Kibogy said.
Meanwhile, the government is collaborating with various entities on the Safe Milk Kenya campaign to ensure consumer protection and awareness.
These are USAid, Feed the Future and Bio Foods, the premium dairy processor known for superior quality standards.
All milk processors and the Kenya Dairy Board have laboratories to ensure quality. The goal is to drive public awareness on milk quality, safety and compliance with the support of USAid.
The current national milk consumption is 120 litres per person per year, making Kenya the leader in Africa.
However, there is room for growth, Kibogy said, adding that increasing milk consumption will benefit the sector, allowing for more value-added products.
About 85 per cent of milk is sold as liquid with the remainder used for products like cheese, yoghurt and ice cream.
The government has also been keen on a countrywide breed improvement programme in collaboration with counties, to upgrade dairy and beef breeds.
In June this year, President Ruto directed that the cost of sexed semen be brought down from Sh8,000 to under Sh3,000, to enable dairy farmers to increase production and productivity of milk.