Challenges ahead for South African dairy sector
Rising input costs, climate variability and market competition threaten sector
18 March 2025
2 minute read
By: South Africa’s dairy industry stands as the country’s fourth-largest agricultural sector, valued at approximately R25 billion (US$1.3 billion) in 2023. With 984 milk producers employing 60,000 farmworkers and supporting an additional 40,000 jobs throughout the value chain, the sector plays a crucial role in both food production and employment, according to a recent US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report.
Despite contributing just 0.4% to global milk production, the industry operates within a well-organised structure designed to represent and support producers and processors. Milk South Africa (Milk SA), a nonprofit organisation and a member of the International Dairy Federation, leads this effort by advocating for the industry’s interests and managing critical industry projects.
A structured industry with strong representation
Milk SA represents both primary milk producers and processors through two key organisations. The Milk Producers Organisation (MPO) serves as the voice of farmers, while the South African Milk Processors Organisation (SAMPRO) supports those involved in processing and distribution. Together, these groups shape policies, promote industry development, and ensure fair representation of all stakeholders.
Funding for industry-wide initiatives comes from a statutory levy administered by Milk SA. This levy, applied per litre of milk and per kilogram of dairy products processed, sold to retailers, or imported, plays a crucial role in sustaining the sector. The funds support consumer education, skills development, and transformation projects aimed at empowering emerging dairy farmers.
Dairy standards and food safety remain a priority
Ensuring food safety and compliance with legal standards is another pillar of the sector’s structure. The Dairy Standards Agency (DSA) monitors dairy products to guarantee they meet South Africa’s regulatory requirements. With food safety a growing concern for both local consumers and export markets, the DSA’s role in maintaining high-quality standards is more critical than ever.
Looking ahead: Challenges and opportunities
While the industry remains well-organised, South African dairy farmers continue to face rising input costs, climate variability, and market competition. The cost of feed, energy, and labour puts pressure on profitability, making efficiency and sustainability key priorities for the future. At the same time, the sector’s structured approach provides a strong foundation to navigate these challenges.
With ongoing investment in transformation and skills development, South Africa’s dairy industry is positioning itself to remain competitive in a changing agricultural landscape. The question is: can it balance sustainability, profitability, and growth in the years ahead?
