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Higher Electricity Costs will Hit Milk Producers Hard

09 April 2008

SOUTH AFRICA - Total electricity costs for milk producers in South Africa could go up to more than R125 million (Rand) per year should Eskom's proposed electricity tariff increase of 60 per cent be approved.

Price increases will also result in producers paying an estimated additional R55 million for more expensive animal feed, animal health products and other inputs according to calculations by the chief economist of the Milk Producers' Organisation (MPO), Dr Koos Coetzee.

The MPO is now appealing to the government and Eskom not to introduce such a steep increase in electricity tariffs.

"Milk producers are already under pressure due to the sharp increases in animal feed, fuel and fertiliser prices and will find it difficult to also absorb higher electricity prices," says Etienne Terre'Blanche, managing director of the MPO.

"Mistakes that were made in the past and had resulted in the current supply problem, cannot be rectified within one year without irreparable damage," says Terre'Blanche.

TheCattleSite News Desk



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