The fasting period of Lent, which lasts for almost two months, has had a major impact on the companies and individuals working in dairy production. Some have seen their production halved, whilst farmers cooperatives and individual sellers also suffer from a reduction in price. Ethiopia, despite having the largest livestock production in Africa, still has an incredibly low average milk consumption per capita, reports FASIKA TADESSE, FORTUNE STAFF WRITER.
For MB Plc, a dairy products company, the first two weeks of the almost two month long lent period has seen its production reduced by half, from 20,000lt to 10,000. Hailu Eshetu, its general manager, says the fasting season is tough on business.
That is a pain shared by most others in similar business, although for them the decline is only about 13pc, by their own accounts. Holland Dairy, in Bishoftu (Debre Zeit), takes the same 7,200lt from its supplying farmers, but it has shifted 1,000lt to cheese and butter production. Genesis Farms, also in Bishoftu, says that it has decreased its intake by 500lt from the usual 3,000lt.
Likewise, Hibret Milk Processor, based in Addis Abeba, and Debre Markos Dairy, in East Gojjam, 299km from Addis Abeba, in the Amhara Region, have also reduced their intake considerably. Whereas the former reduced its intake from 2,000lt to 1,500lt, the latter had from 200lt to 25lt. Sebeta Agro Industry Plc – a prominent milk processor in Sebeta in the Oromia Special Zone – has also decreased its intake by 14pc.
Birqnesh Gebeyehu and Azalech Abera, both residents of Sebeta, have been selling 15lt to 20lt to Sebeta Agro Industry Plc, but have now seen a decline of five litres.
“The Company was buying a litre for 9.50 Br, but now they are paying us only nine Birr,” said Azaleche.
MB Plc is not only buying less milk to cope with the situation, but also producing more cheese and butter, which have longer shelf lives.
Ethiopia has one of the largest livestock populations in Africa, but their productivity is estimated at 1.32lt of milk per cow per day, according to the 2012/13 estimate conducted by the Central Statistical Agency (CSA). A single cow can give milk on average for six months. In the 2012/13 fiscal year, Ethiopia produced 3.8 billion litres of milk – an increase from 2011/12 and 2009/10, which were estimated at 3.3 billion litres and 2.94 billion litres, respectively. But the 3.8 billion in the 2012/13 fiscal year is a decline from the 4.06 billion litres produced in 2010/11.
According to data from CSA, from the total production of milk in 2011/12, 46.6pc was used for household consumption, 4.6pc for sale,0.4pc wages in kind 48.4pc for other purposes, such as a gift for families of the producers. Another portion of 48.4pc is for newly born calves, while some is also wasted in the house.
The data from the CSA also indicates that 61.4pc of butter is used for household consumption, while 34.5pc, is sold. 0.4pc wages in kind Some 3.8pc is used for other purposes. As far as cheese is concerned, 83.3pc is used for household consumption, 12.9pc for sale, 0.2pc wages in kind and 3.6pc for other purposes. Out of the total milk production, about 68.4pc is directly sold by the primary producers to local household consumers who pay on monthly basis; about 14.6pc sold to other customers and 17pc consumed by calves.
Milk suppliers go around selling their milk to various customers, including cafes. Rea Café, located near Mexico Square along the Ras Abebe Aregay Street, bought 25lt on non-fasting days; now that is down to just 10lt, says the barista, Seid Shiferaw.
At Rea café, a cup of milk costs 8.50 Br. A litre of milk fills an average of six cups, which cafes sell for seven to 12 Br a cup with slight price variations. They purchase the milk at a retail price of about 14 Br. A litre of milk fetches from 40 Br to over 70 Br at these cafes.
Razel is another café with a wide milk customer base. Located near Degol Square at the heart of Piazza, along the General Wingate Street, the café regularly buys cheese for burgers and pizza from supermarkets. In the two weeks since lent began, says Hagos Adane, head waiter at the café, the purchased amount has dropped from seven kilograms of cheese for burgers and three kilograms for pizza to 3.5kg and 1.5kg for burgers and pizza, respectively.
The Shewa Supermarket branch at Wello Sefer, along Africa Avenue was receiving between 100lt to 150lt of Mama and Shola milk during the non-fasting season. This amount dropped to 70 to 100lts after lent. The Supermarket was receiving 75lt of Family Milk during the non-fasting season, an amount which has dropped to 50lt after lent. Similarly, the 30lt of Etete Milk they were purchasing previously has declined to 10lt per day, said Shefa Mohammed, the supermarket’s manager.
For some farmers’ cooperatives, however, the effect has been in price as opposed to volume of supply. One of these, Family Corporative – located in Degem woreda in the North Shewa Zone, Oromia Region – is engaged in the production and supply of milk. It supplied 50lt to 70lt of milk daily to MB Plc before lent.
“The fasting season has heavily impacted our business,” Mekonnen Ararsa, the general manager of Family complained. “We used to sell a litre of milk for eight Birr to MB, but have been forced to lower the price to seven Birr after lent.”
The same is true for Holland Dairy, which has opted to maintain the amount of milk it buys from the farmers for fear of losing them as customers. It is also producing more cheese and butter.
Ethiopia expects to achieve a total milk production of 4.9 billion litres at the end of the Growth & Transformation Plan (GTP), which will expire in June 2015. To achieve the estimated amount, however, the industry will have to have grown by 10pc annually.
Ethiopia has the largest livestock population in Africa and is 10th in the world. However, its per capita consumption of milk in a year is 20.3lt. This is way below the World Health Organisation (WHO)’s recommendation of 209lt. Moreover, the per capita consumption is far lower than neighbours, Kenya, which consumes 120lt, and Sudan, whose consumption stands at 180lt.
Melake Assefa, a higher expert of dairy products at the Ministry of Agriculture (MoA), says the industry is not growing at a reasonable pace for three main problems.
Primarily, he mentions the cattle breeds as an issue. Second comes the inefficiency of cattle management. Another problem is the low quality of feed. The Ministry is working to improve cattle breeds, he said, and providing training to farmers and experts.
Mikias Abebe, a salesman at Newyork Supermarket, arranging yoghurts in the display refrigerator.
The supply of milk and yoghurt has decreased in amount beginning the commencement of the lent.
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