Dairy farming in 2016 demanded more than endurance. South African producers were dealing with drought, low milk prices and high feed costs, while the number of dairy farmers had already fallen substantially. Yet some farms continued to perform, expand and invest. The common thread was not that successful farmers could control the weather or the milk price; it was that they concentrated on the parts of the business they could influence. The practical challenge was to limit avoidable losses, use labour and money efficiently, and make decisions with a clear view of risks and market signals.
Protect the herd before expanding it
Growth can look like a route to success, but buying animals without safeguards can put years of herd-building at risk. Dr Chris van Dijk warned that bringing in only one or two animals carrying an invisible, subclinical infectious disease could damage an established herd. Veterinary reports cited increasing cases of mastitis and outbreaks of bovine viral diarrhoea (BVD) after new animals were introduced. Both diseases can cause major economic losses and put pressure on cash flow.
The practical answer is a structured biosecurity programme developed with the farm veterinarian and followed by everyone involved on the farm. For incoming animals, the first steps are to provide isolation and quarantine facilities and to make testing a firm condition before animals join the resident herd. These measures matter especially because very few South African dairy herds are truly closed.
Treating disease-related losses as simply part of farming is a risky calculation. Van Dijk noted that some producers were prepared to “sacrifice” between 1% and 10%, but warned that in difficult financial conditions losses of that scale could mark the difference between success and failure. Prevention is therefore not an optional extra attached to expansion; it is part of deciding whether expansion is financially sound.
Put effort into what the farm can influence
A farmer cannot make drought or the market milk price disappear. The editorial advice in the episode was instead to focus energy on controllable factors: successful producers do not give up in response to circumstances, but they also avoid wasting effort fighting what lies beyond their control. They seek the best possible milk price by delivering the best-quality milk and earning every available return associated with quality.
Efficiency is another controllable lever. The drought and high feed costs had made the year exceptionally difficult, but the episode argues that the pressure also exposed weaknesses in how farms used time and resources. As producer numbers fell and the number of animals per remaining herd increased, every minute and every rand needed to be used as effectively as possible. Mechanisation was presented not simply as a way to expand, but as a means of improving efficiency. The same logic applied to training: investment in people, including the successful IST herd managers’ course held at the Alfa show in Parys, was one way farms could strengthen their management capacity.
The standard should be to avoid spending scarce time and money on unproductive animals or suboptimal working methods. The test for any investment is whether it improves how the farm operates—not whether it merely adds scale. The producers who learned from the 2016 crisis, the editorial suggested, could emerge stronger, smarter, more efficient and more profitable, provided they carried those lessons into the next difficult season.
Read price information for what it can—and cannot—say
Economic decisions also require care with the indicators used to interpret the dairy market. The raw milk price index tracks movements in the price processors pay for milk; the processed dairy-products price index tracks what processors receive for products; and the retail index tracks changes in the consumer basket of milk, cheese and eggs. Together, their movements can show how prices change relative to one another over time.
But an index does not establish whether the producer price is higher or lower than the processor price. The series uses 2012 as its base year and assumes that the relationship between producer and processor prices in that year was normal or ideal; choosing a different base year would produce a different picture. The raw milk price index is also unweighted, so movements at processors handling small volumes can have an outsized effect and exaggerate sharp rises or falls. The indices are useful as signals of relative movement, not as a complete account of the value or fairness of prices.
The figures discussed in 2016 pointed to serious pressure on producers. Milk production in December 2015 was 3.5% below December 2014, even though total production for 2015 remained 5.5% above 2014. January 2016 milk intake was down 4.9% year on year, and the MPO estimated that full-year 2016 deliveries could be at least 3% below 2015. Later, a simple time-series forecast estimated 2016 intake at about 3,027 million litres, 1.5% below 2015. These were estimates made at different points in the year, not interchangeable final results.
The economic commentary also pointed to a gap between producer prices and prices elsewhere in the chain. In March’s Dairy Digits discussion, the MPO said the sharp decline in producer prices compared with other price movements suggested room for producer-price increases. In the same period, the weakening rand raised international product prices in rand terms, though the commentary said this did not necessarily mean imports would rise substantially.
Negotiate carefully, and value reliability
Where producers have room to negotiate, timing and the choice of buyer matter. The economic advice was to seek more favourable producer prices, particularly before the winter-season window for negotiations closed. At the same time, farmers were urged to sell to responsible, reliable buyers able to pay on time, and to be wary of fly-by-night operators promising unrealistic prices during periods of scarcity. A headline price is not useful if payment is uncertain.
The episode also recorded pressure on processors to raise producer prices as input costs mounted and retail prices rose. In 2016, Clover announced increases effective 1 July: 30 cents per litre for producers in the North West and Highveld, 20 cents in KwaZulu-Natal and 24 cents in the Eastern Cape. Transem announced a 36-cent-per-litre increase from the same date for North West producers; Woodlands Dairy announced a 20-cent increase from 1 June. These specific increases illustrate why farmers needed to follow individual buyer announcements and assess what applied to their own supply arrangements.
The overall lesson is not that every threat can be avoided. It is that avoidable risks—especially preventable disease, inefficient routines and careless buyer choices—should not be accepted as inevitable. A resilient dairy farm protects its herd, invests in practical efficiency, reads market indicators with care and negotiates with both price and payment reliability in mind.
Key points
- Use veterinarian-led quarantine and testing before incoming animals mix with the herd.
- Treat biosecurity as a financial safeguard: mastitis and BVD can cause substantial losses and cash-flow damage.
- Improve efficiency through better work methods, suitable mechanisation and investment in staff training.
- Interpret price indices as measures of relative movement, not direct comparisons of producer and processor prices.
- Negotiate at the right time and prioritise buyers with a record of reliable payment.