Table of Contents


Find also the “Dairy (cattle)” and "Dairy (goats and sheep)" chapter in the Livestock section.


1. Overview

“Milk producers” are milk farmers. “Milk processors” buy milk from producers and process it for the retail market. Some role players, of course, are both, and the reader will find many of these listed under heading 5 (see the “Dairies and milk processors” subheading). In order to survive, many farmers have extended their activities beyond the farmgate and are involved in both the “field” and “fork” parts of the value chain.

This chapter covers the processing side, the dairy secondary industry: milk powder, flavoured milk, cheese, cottage cheese, feta cheese, maas (Amazi), yoghurt, evaporated and condensed milk, cheese powder, buttermilk, cream, sour cream, butter, and milk itself – pasteurised, long-life or ultra-high temperature treated (UHT).


2. International business environment

  •, website of the International Dairy Federation provides global dairy statistics.
  • A sister website, provides “a global framework for a holistic approach to sustainability in the dairy value chain”.
  • Find the current world production, market and trade reports at
  • Global Dairy Trade
  • The annual Lacto Data and monthly Dairy Market Trends provide the latest statistics on the dairy industry, including breakdowns of imports and exports. Find it on The Quarterly Review, prepared by the MPO and SAMPRO (see heading 6), does the same. Find it at
  • The Bureau for Food and Agricultural Policy (BFAP) Baseline 2018-2027 includes an overview of global milk and dairy products (see from page 75). Find the document at


3. Local business environment

Find the monthly “Dairy Market Trends” at and the Quarterly Review at

  • The South African milk market can be disaggregated into 2 segments: Liquid milk products (including pasteurised milk, UHT milk, yoghurt and buttermilk) account for just over 60% of total dairy consumption, while concentrated products (including cheese, butter, milk powders and condensed milk) make up the remaining 40%. The share of liquid milk products has increased consistently over the past decade, from 55% in 2007, to 61% in 2017.
  • Over the next decade the market will continue to trade in a fine balance between supply and demand. Therefore, given the high sensitivity to climate and macroeconomic factors that influence demand, prices are likely to remain volatile going forward.
  • Supported by rising income levels and swift urbanisation, cheese consumption increased by 81% over the past 10 years.
Source: Bureau for Food and Agricultural Policy (BFAP) Baseline 2018-2027


4. Notes on adding value to your milk

Milk is a “cash crop” and most people are users and cash buyers (including your neighbours!) The question is: should you sell fresh milk or add value by producing and selling fermented products (amasi, yoghurt, cream cheese)?

Adding value to your milk

You can nearly double your turnover on the same amount of milk with relatively little extra cost of pasteurising and additives, and definitely make money out of a small-scale dairy.

Some considerations:

  • There is also the cost of additives – culture medium, stabiliser, flavourant (like vanilla) and yellow colouring agent.
  • Keep an eye on Eskom costs in future – pasteurizers chew power!
  • Competition from the “Big boys” means that making milk-powder, long-life milk and butter is not recommended, even if you could afford the very expensive equipment.

What is needed for producing fermented products?

  1. Firstly a nearby market that will buy your product
  2. Electricity from Eskom – not generated off diesel or petrol power (too expensive)!
  3. A Batch Pasteurizer – say big enough for 1 or 2 days milk production
  4. A warm room (for Amasi) to mature the fermented product; (or your thermostatically controlled batch pasteurizer for other products like yoghurt).
Source: AXXON