2012 Dairy Genetics Market Situation

An Expert's View about Cattle in Kenya

Posted on: 12 Mar 2012

U.S. cattle genetics producers and exporters will likely experience declining demand and market share in Kenya.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 2/29/2012 GAIN Report Number: Kenya Post: Nairobi 2012 Dairy Genetics Market Situation Report Categories: Livestock and Products Approved By: Stephen Hammond Prepared By: FAS/Nairobi staff Report Highlights: U.S. cattle genetics producers and exporters will likely experience declining demand and market share in Kenya consistent with the declining farm size of small-scale farmers. Kenyan small-scale farmers, many of whom have one or two dairy cows and a small plot of farmland appear to be opting with greater frequency for Ayrshire genetics. Most analysts expect that the transition away from the Holstein breed will be very slow and correlated to retiring farmers dividing their farms to the benefit of their children. Executive Summary: Government of Kenya (GOK) statistics indicate that cattle producers own about 14 million indigenous (Zebu) and three million dairy cattle. More than 650,000 small-scale producers own 80 percent of the dairy cattle, the most vibrant sector for animal-genetics through artificial insemination. Small-scale producers depend in large part on rain to water and feed for their dairy cows. Reportedly, Kenyan small-scale dairy producers have begun buying Ayrshire genetics, because the breed generally exhibits strong body structure, foraging adroitness and good milk production even during periods of dryness, and good longevity. These advantages become even more important as small-scale farmers divide their plots into even smaller plots. Anecdotal evidence seems to reinforce Kenyan dairy industry data indicating that these small-scale farmers produce much of Kenya?s milk. During the raining seasons when fodder becomes readily available, Kenya?s countryside and cities overflow with milk. Milk prices to small-scale dairy farmers plummet. Farmers give their milk away and even retail outlets reduce consumer milk prices. During these periods, schemes that would increase milk processing or otherwise increase consumption appear and then the dry periods return. As a result of the abovementioned transition to smaller farms, many local analysts expect slightly declining import prospects for U.S. genetics in the Kenyan market (please see the table here below). Other prominent suppliers to the market, some of whom have strong Ayrshire genetics, include the South Africa, Canada, and the Netherlands. Calendar Year 2010 2011(E) 2012(E) 2013(F) Local Production (1,000 straws) 659 700 750 800 Exports (1,000 straws) 0 0 0 0 Imports(1,000 straws) 250 250 300 300 Imports from the U.S. (1,000 straws) 180 180 178 175 U.S. market share (percent of total market) 17 16 14 14 (E) (F) FAS/Nairobi estimates and forecasts, respectively
Posted: 12 March 2012

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