The country’s dairy industry is facing a significant decline, with only three farmers currently supplying milk to the Namibia Dairies , an official has revealed.
According to the Bank of Namibia’s Director of Research and Financial Sector Development Emma Haiyambo, this marks a steep drop from the more than 20 farmers who supplied the industry a few years ago.
The challenges threatening the sector are multifaceted, with a combination of rising input costs, environmental issues, and competition from cheaper imports.
“Currently, only three farmers supply milk to Namibia Dairies, a sharp decline from over 20 farmers just a few years ago. In total, fewer than 10 dairy farmers now remain in the country,” she said.
She further explained that milk production in the country has been steadily decreasing since 2019, with most dairy farms located in the Hardap region.
Haiyambo said the farmers are heavily dependent on water levels from the Hardap Dam, which have been fluctuating due to ongoing drought conditions.
Low dam levels directly impact milk production, as water is a critical resource for dairy operations.
“Milk production has been steadily declining since 2019, with most dairy farmers based in the Hardap region. These farmers rely heavily on water levels from the Hardap Dam, which have faced ongoing challenges. When dam levels are low, milk production is significantly affected,” she said.
she said adding to the pressure is the rising cost of cattle feed, which is one of the most significant expenses for dairy farmers.
Feed costs now account for up to 70% of the total production expenses, further squeezing profit margins. The dairy sector also faces competition from cheaper imports, primarily from South Africa.
Haiyambo said while fresh milk is zero-rated for tax purposes in Namibia, processed milk products are not. In contrast, South African milk products benefit from zero-rating across the board, giving them a competitive price advantage.
“The dairy industry is currently under threat. In South Africa, all milk products are zero-rated for tax purposes, while in Namibia, only fresh milk is zero-rated. Additionally, the high cost of cattle feed, a major expense for farmers, further impacts milk production,” Haiyambo said.
With fewer than ten dairy farmers remaining in the country and only three actively supplying milk, the industry is at risk of further decline.
Haiyambo warned that without intervention, such as improved support for local farmers and measures to reduce production costs, Namibia’s dairy industry may continue to shrink, leaving the country more reliant on imports.
