Farmers are getting higher gains as drought takes a toll on supplies with milk and sorghum buyers lifting prices to keep the scarce supplies flowing in.
Milk farmers are having the first say as processors outbid each other to create auction market in which market leader Brookside has upended prices to feed its tanks.
Brookside has raised its prices to farmers by 13 percent to Sh42 a litre compared to KCC’s price of Sh40 a litre even as prices of milk in the shops rose from about Sh48 to Sh55 a litre currently in less than a month.
Brookside controls about 45 percent of the market with KCC holding about 21 percent of the market with the rest held by small processors.
Drought has ravaged several parts of the country increasing the cost of animal feeds and cutting production of milk.
East African Breweries
On the other hand East African Breweries last week sent a statement to its licensed producers increasing prices of sorghum pointing to reduced supply. It has increased its price to farmers from Sh34 a kilogram to Sh38.4 a Kg while the price of millet has been increased to Sh50 a kg.
EABL has contracts with farmers around the region at fixed prices, but said it was increasing prices for a selected period during the dry season inorder to keep the grains from being diverted to more attractive offers.
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“In recognition of the growers efforts during the current season which was characterized by prolonged drought, the company has adjusted the prices for sorghum and millet for all deliveries made between February and 30th June 2017,” the brewer said in a statement to farmers.
The move will see farmers pocket high revenues while handing them more power at the market place unlike most of the time when they are at the mercy of middlemen.