At a time when SA's dairy industry is losing milk producers because of the sector's limited viability, an international index has forecast growth for the industry from an expected rise in prosperity and buying power among consumers in emerging markets including Africa.
The index, conducted by global food processing and packaging company Tetra Pak, claimed that more people would increasingly consume packaged liquid dairy products, opening new business and job opportunities o n the continent.
However, according to the Milk Producers' Organisation there were 30000 dairy farmers in SA in the late 1980s, and only 2600 today. Its chairman, Dean Kleynhans, blamed big milk buyers in SA for holding farmers to ransom by paying less than R3/l for milk while the retail price was well above R10/l.
Last year, the Overberg and the George district recorded the highest number of dairy farmers quitting the industry, some branching into other sectors, a factor some saw as contributing to higher milk prices.
According to the index - a bi-annual report released on Friday, 4 May 2012 - the market for dairy products has the potential to grow by 2,7-billion people, largely from low-income consumers in developing countries.
It forecast consumption by these consumers to increase from about 70-billion litres last year to almost 80-billion litres in 2014.
Low-income consumers living on US$2 to $8 a day made up about 50% of developing countries' population, and consumed 38% in developing countries. Half of these consumers live in India and China.
However, the research also included consumers in Indonesia, Pakistan and Kenya whose populations were expected to grow in affluence, shifting from low to middle incomes by the end of this decade. Rae McGraw, communications cluster leader at Tetra Pak sub-Saharan Africa, told Business Day that statistic showed that there was no longer a reason for milk farmers "to bail out or quit".
Urban migration was driving the need for convenient and ready-to-drink packaged products.
Tetra Pak president and CEO Dennis Jönsson said low-income consumers represented one of the biggest growth opportunities for the dairy industry.
"The key to tomorrow's success is reaching these consumers today. They live in economies driving our industry's growth and they are growing more affluent," he said.
Source: Business Day
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