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MPO press releases

6 November 2007

PRESS RELEASE ISSUED BY ETIENNE TERRE’BLANCHE,
MANAGING DIRECTOR OF THE MILK PRODUCERS’ ORGANISATION

MPO investigates rising input costs
The board of the Milk Producers’ Organisation (MPO) has ordered an inquiry into the sharp rise in input costs over the past two years. This includes fertiliser, fuel, energy and feed costs. Due to these price hikes, many milk producers are now worse off than before the increase in the producer price.

“The investigation was ordered in view of the fact that rising food price inflation is being blamed on farmers,” says Etienne Terre’Blanche, managing director of the MPO.

“Farmers are portrayed as big profit takers at the expense of consumers, while the reality is that other players in the value chain relay price increases that the farmer has to absorb. The profit takers are, as always, everybody but the farmer.”

According to Terre’Blanche, the price of dairy meal, for example, increased by 81% between June 2005 and August 2007. Over the same period the producer price for milk increased by 49%. Feed costs were not the only increased expenditure – other input costs showed similar trends. The price of diesel increased by 28% over the same period and the price of fertiliser increased by between 30% and 80%.

If the situation persists along these lines, says Terre’Blanche, consumers can expect even more severe milk shortages.

He adds that producers abroad enjoy far better producer price increases compared to South African dairy farmers. The hope therefore remains that producer prices may still be adjusted upwards, improving the local dairy producers’ situation.

For more information, phone Etienne Terre’Blanche on 012 843 5600 or 082 900 7676

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