Diary Farming in Africa – meeting the growing demand
By Emmanuel Allottey
Dairy farming is one of the leading agricultural activities in almost all parts of the world. Africa’s population is expected to double by 2050, growing at 2.7% a year. This expansive growth places an increased demand for food security with a significant impact on African agriculture and, more specifically, the dairy industry. The coronavirus pandemic has increased health consciousness translating to a higher demand for immune boosting foods such as milk and milk products.
Demand for milk is growing across the continent. A recent survey published by global packaging company Tetra Pak is projecting Africa to see an increase of more than 50 percent in liquid dairy consumption, growing from 15 billion liters in 2010 to almost 25 billion liters in 2020 driven by population growth, urbanisation and improved purchasing power.
The top milk producing nations in Africa are Ethiopia, Kenya, South Africa, and Sudan. Among the top four milk producing countries, only two (Ethiopia and Kenya) are self-sufficient, meaning dairy production meets or exceeds dairy consumption. The opportunity exists for other nations to increase their dairy production rather than needing to import dairy products.
Africa’s dairy industry is underdeveloped but has the potential to improve by a large percentage. Many African countries have enough natural resources to develop a sustainable dairy industry. The dairy industry in many African nations are faced with a number of challenges, including low productivity per cow, fluctuating milk production, inconsistent milk quality, the high cost of production, inefficiencies along the value chain and a large informal sector.
The dairy industry requires collaboration from key stakeholders such as the government and private sector through renewed attention and investments to drive the development of the industry. In addition, the ability to benchmark and adopt best practices and experiences from advanced nations is very important to ensure the transfer of technologies and knowledge between dairy stakeholders to support the sector’s continued growth.
The dairy industry is garnering the attention of private equity investors who see its growing demand in Africa in the face of insufficient capacity and its cash generative value in conjunction with beef cows are in abundance on the continent. However, dairy farming has been overshadowed by beef cow farming and its contribution to reduction in food shortages in Africa.
Demand for milk is expected to increase in the future years and unlocks the opportunity for entrants in the dairy farming industry to grow their business as they satisfy demand.