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The Dairy Development Authority (DDA) has appealed to local milk processors to invest in casein acid milk processing and powdered milk production.

The twin value addition investments, DDA officials say, will raise the value of raw milk.

“Producing both casein and powdered milk offers longevity and high prices at the international markets,” DDA's executive director, Samson Mpiira Akankiza, says.

Akankiza, who addressed the National Diary Platform (NDP) executive members at Golden Tulip Hotel in Kampala last week on Wednesday, added that the processing cost of pasteurised milk fetches an export factory price of shillings 2,200 per litre.

This, he said,  leaves processors with a profit margin of shillings 248.

“Having seen the farm-gate milk price per litre at shillings 883 for small and medium farmers in the country, raising the price of farm-gate farmers will make processors operate at a loss,” he said.

The only way to help raise farm-gate prices, Akankiza added,  is to encourage milk processors to invest in more durable and long-lasting processing of casein milk products and powdered milk.

“Pasteurised milk and Ultra High Temperature (UHT) milk production of let's say Jesa and other classic brands take from one to three months compared to casein and powdered milk which takes a longer shelf-time,” he said.

In 2021, Uganda exported $5.75m (about sh18b) in casein, making it the largest exporter of casein in the world. In the same year, casein was the 37th most exported product in Uganda.

“The main destination of casein exports from Uganda are the United States ($5.64m) and Ethiopia ($107k), which are the fastest growing export markets between 2020 and 2021,” Akankiza said.

Milk exports, DDA officials said, are expected to increase by 3.3% within the next three years.

Akankiza said the production of more milk powder and acid casein has  potential to increase farm-gate prices of milk for livestock farmers and weed out exploitative dealers.

“Only a limited number of processors’ firms engage in trading diary products,” he said.

Uganda currently relies on Kenya as the main market for dairy products.

However, the chairperson of the National Dairy Stakeholders Platform (NDSP), Solomon Osewe Oketcho, warned that over-reliance on a single market poses risks to Uganda’s dairy products.

Samson Mpiira Akankiza, the DDA Executive Director, addressing media on production of casein and powdered milk. (Photo by Isaac Nuwagaba)

“Closure of Kenya milk markets recently affected us because 90% of liquid milk is taken by Kenya but diversifying export markets is crucial for sustained growth and resilience,” he said.

On his part, Akankiza said by January next year, Uganda will explore the Algerian market for milk products.

“We are aware and the Government started negotiations with Senegal, Indonesia, and Serbia but exporting casein and powdered milk would ably earn farmers a big price at the farm gate,” he said.

Informal trade accounts for less than 15% of Uganda’s total dairy exports in the 2020-2021 financial year.

“Powdered milk has several benefits over liquid milk, including but not limited to long shelf life, space-efficient storage, and has high nutritional value for those who want to stay healthy,” Oketcho said, rooting for quality checks on the Uganda dairy products if the new market is to be exploited.

What farmers say

Beatrice Okello, livestock farmer from northern Uganda

Raw milk cost at the farm-gate is sh880 only, especially from milk collecting centres across the country. This is affecting farmers.

Ben Twine, the chairman of the Livestock Development Forum (LDF) 

Government should look at policy gaps, market gaps and production gaps to increase the quantity and quality of milk.

Martin Pahias, the project coordinator of Food and Agriculture Agrinvest (FAA) 

Address challenges facing the dairy industry along the value chain with all stakeholders, farmers and transporters engaged from the farm gate.

This article first appeared in Saturday Vision edition of December 23, 2023.