KCC to retain farmer returns despite cut in retail price

State-owned milk processor New KCC will not increase producer prices even after offering a Sh10 relief to the consumer last week.

“In the last six months, we had severe drought in the country. As a processor, we are not reviewing producer prices to cushion farmers since their livestock as well pasture situation are still recovering,” said New KCC managing director Nixon Sigey.

In March, the country’s major milk firms -Brookside and New KCC increased milk producer prices, as known as farm gate prices, to an all-time high of Sh42 and Sh43 per litre respectively in a bid to cushion farmers against effects of drought.

And early last week, both reduced the price of fresh milk by Sh10 per half-litre packet.

A spot check in major retail chains showed that milk shelf prices begun falling from Thursday, with half a packet retailing between Sh55 and Sh60. The drop followed a slight increase in raw milk supply and the importation of duty-free milk powder.

“The forces driving market correction have commenced, with a major change being the improved supplies from farmers,” said Mr John Gethi, Brookside Dairy director of milk procurement.