Milk price decreases could permanently damage the dairy industry, the Milk Producer's Organisation warned on Wednesday, 2 June 2010.
Chairman Dean Kleynhans said at the moment the industry was seeing "contra-cyclical pricing trends".
"International prices continue to increase, making dairy imports all the more expensive."
It was disappointing that a number of milk buyers, especially those in drought-stricken areas of South Africa, were currently decreasing the prices at which they sold the product on to producers.
Such actions could cause great and permanent damage to these areas.
"Milk buyers in supplier areas have a moral obligation to protect the sustainability of their suppliers," he said in a statement.
Should the situation persist, it could lead to major geographical shifts in milk production, which could ultimately affect the capital investment of milk buyers.
The MPO said such pricing behaviour could easily lead to South Africa becoming a net importer of dairy products, making it unable to supply its own population with milk.
Recent price decreases meant many milk producers were already operating below break-even levels.
The MPO was concerned about the recent noticeable decrease in the number of milk producers, a trend which might continue for some time.
Source: Sapa
