Drop in milk collection jams butter production
The drought has seen a drastic decline in milk production, which has made manufacturers rethink certain products like butter.
Low rainfall has seen unfavourable grazing conditions which led to animal feed unavailability impacting milk production amid suppliers being under pressure. This milk shortage in the market has got suppliers focusing mainly on milk giving a backseat to butter, but also intensifying manufacturing high margin yield products such as yoghurt, industry analysts say.
Butter, is a semi- solid mass that contains 85 per cent of milk fat. A dairy cow must eat a balanced diet with enough energy, protein, fibre, water, minerals and vitamins to contain its maintenance and growth and notably, the milk production, but the majority of the farmers use normal grass as fodder, which has very little nutritional value. This is mainly due to the limited land availability for fodder cultivation such as maze, sorghum and sugar graze.
Sourcing grass too has not been easy. “It is difficult to find grass and water for animals. The drought has seen a drop in milk production,” former Minister Mahinda Yapa
Abeywardena told the Business Times. He said that profitability is one of the main problems faced by the Sri Lankan dairy farmers. As a result, farmers have adapted to a low- cost production system, which has resulted in low milk yields.
Most brands of butter including Highland butter were hard to find in supermarkets, customers say.
Butter is made by operating a milk spray dry plant using excess milk – after making powdered milk. "So we need a sufficient ( excess) amount of milk to run this 24 – hour plant which we cannot do now because milk supply is inadequate,” an industry player told the Business Times. He said the cost of production does not justify operating a plant like this where the plant’s cleaning cost is around Rs. 600,000 a day.
So producers are utilising milk for other, possibly higher margin, dairy products such as yoghurt. For instance MILCO which manufactures Highland has intensified its yoghurt production which gives a better margin.
The milk production at the National Livestock Development Board (NLDB) was 11 million litres, while it is 62 million litres by MILCO (Pvt) Ltd.
Total milk production in the country was 490 million litres in 2019, according to government officials. They said that dairy production in the country has recorded positive growth during the last decade, especially after 2008 (after the war).
The domestic milk production is only sufficient to meet 42 per cent of the requirement. To address this issue, a long- term strategic plan to increase milk production in the country with the interest of the government, private sector and related institutions is crucial, analysts say.
Ariyaseela Wickramanayake, Chairman of Pelwatte Dairy Industries Ltd has another story to say.
He said that the whole country’s butter needs are 700 tonnes annually. “This has been the case during the past 10 years. I have three milk powder plants and I can make three times the requirement that's needed. I am not sending butter that we manufacture to modern trade ( MT) outlets because I need 45 days to collect cash from them and it is not viable for me as I have to pay farmers every 14 days," he explained. He said that Pelwatte butter is sold at the company‘ s outlets at Arangala, Nugegoda, Galle, Colpetty and Marine Drive.