Milk price increase vital to save SA’s dairy industry

Johannes Loubser, the 2018 National Dairy Master of the Year, runs a 2 400-cow dairy unit that produces 84 000ℓ/day. He spoke to Jeandré van der Walt.

How did you experience 2018? We were, once again, confronted with high feed prices and low milk prices, which can be attributed to the difficult economic environment, and that put the profitability of the dairy industry under severe pressure. I suspect this environment will linger until mid-2019.

Fortunately, we received sufficient rainfall during winter, which resulted in a good grain and silage harvest.

Overall, our dams are also fuller compared with last year.

what will you focus on in 2019? My main focus for next year will be on the three cornerstones of our dairy, namely animal health, fertility and production. If these are in place, you are in business. However, I advise farmers to be cautious not to expand and develop too quickly, especially given the difficult climatic conditions we have only just slightly recovered from. Wh at is the future of dairy farming in South Africa?

Due to the sharp drop in producer prices, a number of dairy farmers have already left the industry, and while it is difficult to predict the future of the sector, it is worrisome that so many dairy farmers have left. Twenty years ago, there were about 15 000 dairy farmers; today, there are only about 1 300.

I believe that the milk price must increase with a minimum of R1/ℓ in order for dairy farmers to keep their heads above water. However, I do not predict any big increases in the milk price over the next six months due to the stagnant economy. Are you optimistic about the future of farming in South Africa?

Yes. We have a growing population that must eat, and demand for food is thus good. However, we need a more favourable political climate. Currently, the industry is engulfed by uncertainty, which makes it difficult for farmers to invest in any capital expansion, thus hindering production. Despite the amendment of the Constitution to allow for expropriation without compensation, I don’t think government will rapidly expropriate commercial farms.

• Email Johannes Loubser at johannes@faircape.com.