The Effect of COVID-19 on Production and Marketing of Milk: The Case of Selected Dairy Processors in Kenya.
It has been noted that there is increased demand for long life dairy products in the Kenyan market. Dairy products outlets such supermarkets have been buying large quantities of long life products and especially ultra-high temperature processed milk. This induced demand shock may be due to the fact that with uncertainties in the dairy market, buyers and consumers can minimize risks associated with spoilage. There is particularly artificial buying and hoarding of milk products by most retailers though prices have not changed since scarcity has not yet set in. Similarly, there is increased demand for value added products such as yogurt and fermented milk. This increased demand is a blessing to the processors as value added products have also higher profits than fresh milk.
The first case of COVID-19 was detected in Kenya in early March 2020. After the government embarked on mass testing in April, the number of daily cases rose rapidly reaching as high as 49 by May 2020. The government also came up with various mitigating measures including restricted movement, such as the dusk to dawn curfew, while allowing transportation of agricultural products during the day. Thus all stakeholders have identified agriculture, and especially food production, distribution and marketing, as one of the essential services that must go hand- in- hand with healthy measures in order to ensure food security for majority of Kenyans.
Stricter COVID-19 prevention measures in the country include cessation of movement in and out of infection hotspots such as Nairobi Metropolitan and counties of Mombasa, Kilifi and Kwale. On May 16, 2020, the borders of Tanzania and Somalia were closed, except for cargo transport among the neighboring countries. As expected such interventions have serious implications on the transportation of milk and other agricultural products from farms to markets, including export ones, despite being classified as critical and essential products and services.
However, according to the three dairy processors participating in Africa-Milk Project (Mukurweini Wakulima Dairy Ltd, New Kenya Cooperative Creameries (NKCC) at Sotik, and Happy Cow Ltd) the devastating impact of coronavirus pandemic on the country’s economy and the subsequent measures taken by the government to curb high rates of transmission among the public have had mixed effects on diary production and marketing. Nevertheless, the three processors are experiencing one or more new challenges or setbacks arising directly or indirectly from this pandemic. These challenges are listed here-below.