Milk.

Southern Africa is in the midst of a serious milk supply shortfall. The drought of the past few years has caused production problems, which are mainly to blame for the shortages.

According to the Oxford Business Group's economic briefing South Africa (July 26, 2007, Vol. 76), "The long-running drought has pushed up prices of maize and wheat by 50 percent and 43 percent respectively so far this year, a cost that has been passed on to dairy producers who grain feed their stock. This in turn has forced some farmers to move out of the uncompetitive [sic] dairy products market in search of more lucrative returns."

South Africa, however, is not the only market in the region to be affected. Market: Africa Mid-East has reviewed reports of milk problems from Botswana, Namibia, and Zimbabwe as well. Even countries outside the region are reporting problems--for example, Rwanda.

In Southern Africa, the supply shortages and the escalating price of milk has affected the entire dairy industry because of the importance of milk in the production of other dairy products. The Oxford Business Group commented that the global shortage of dairy products has also made the price of imported milk and other dairy products expensive.

Citing an official of the South Africa Milk Producers Organization, Oxford said that price increases were likely to persist until the end of 2007. And while shortages are evident in empty supermarket shelves, milk has not disappeared from the distribution chain with fresh milk still available in smaller outlets.

Local production has been increasing at the rate of one percent per year. But demand has been increasing the rate of four percent per year adding further pressure on shortages.

Dairy firms are reportedly adding capacity, but the move depends on the time consuming restocking of cattle herds.

According to a July 19, 2007 posting on the iAfrica.com website, a Cape Town business news portal, rising milk prices are actually helping the "struggling dairy farming sector."

On July 6, 2007, a Botswana newspaper, The Reporter (Gaborone) quoted local mothers who are worried about buying fresh milk for their young children. These consumers also said that they recognized the risks for dairy farmers in Botswana.

The Reporter said that the milk shortage in Botswana was much more serious. The paper's headline called the milk shortage a "crisis."

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