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Private companies join Dairy Board’s push to revive milk consumption

Published:Thursday | February 4, 2016 | 11:59 PMTameka Gordon

The Dairy Development Board has got private sector buy-in for its latest drive to revive the industry under a new campaign dubbed ‘Drink Real Milk.’

Its three partners — Seprod, the CB Group through its Nutramix subsidiary, and fertiliser company Newport Fersan Jamaica — will now pump capital and technical expertise into the campaign to increase production and consumption.

The move comes amid several attempts to resuscitate the ailing sector, which up to 1992 saw some 38.8 million litres of milk produced.

Currently, though over 60 million litres of milk and milk substitutes are consumed each year, less than 20 per cent of which comes from Jamaican farmers, according to industry data.

The new initiative aims to overhaul the industry by introducing new and improved technology, new farm management practices and new pasture management, the partners said at the January 28 launch.

Seprod, which owns the largest local dairy producing entity, Serge Island Dairies Limited, has committed to supplying “at least half the cost” of the projected $20 million for the campaign this year, CEO Richard Pandohie told the Financial Gleaner.

The boost to local production will feed into Serge’s own lines, Pandohie said.

Among the issues that have plagued the sector is the unavailability of fodder-or grass-to feed the cows and thereby increase their milk output. To arrest this, the partners said some 2,000 acres have been earmarked for grazing.

Newport Fersan’s technical assistance will, among other things, assisted farmers with increasing their fodder outputs. The fertiliser company has already committed $2 million in cash with technical assistance projected to take that input to $7 million overall.

“We have employed an agronomist who will be devoted to this campaign,” Newport’s business development manager, Hedda Rose Pitter, told the Financial Gleaner.

The total budget will be broken out as the various phases are developed, said brand manager at Nutramix, Tina Hamilton.

“We plan on overseeing the entire pasture management programme. The objective is to ensure that the nutrient programme for grass in on target. Through premise nutrient systems, we are committed to taking and analysing samples and supporting the technical team at Seprod with our technical visits from  our agronomist,” Pitter said.
Drink Real Milk projected to last over 10 years, the partners said.

For its part, Nutramix will lead the marketing and consumer engagement components of the campaign.

“It’s hard to calculate exactly what we are putting in because it’s a lot of our time, resources and human capital,” CB Group chief operating officer, Mathew Lyn said of his company financial input.

CEO of the Diary Development Board, Hugh Graham appealed to retailers to keep the cost of milk at an affordable level to pull consumers.

“We have some history that we need to clean up. When the shelves were mostly pasteurised and homogenised milk, the supermarkets insisted on a 35-45 per cent mark up to compensate for their refrigeration costs. Now most of the milk on the shelf is UHT and that refrigeration is not necessary. We need to see a shift in this market anomaly,” Graham chided.

With some retailers selling at roughly $310 per litre and the farmers only getting $70 per litre, Graham pressed for more affordable prices.

“I went into one particular supermarket and the price was $243 per litre, and they, I’m sure, are not making a loss. So there is no reason for milk to retail at $310,” the dairy board CEO said. “We need to appeal to our supermarkets and those at that end of the value chain, to take a serious look at some of these items, it would assist ... so that we can all drink real milk”.