From cow to supermarket shelf: The supply squeeze behind Kenya’s rising milk prices

Kenya’s milk problem begins well before a packet reaches a supermarket shelf.

Agriculture Cabinet Secretary Mutahi Kagwe said in early October that milk deliveries to formal processors had fallen by about 5.8 per cent.

Ministry figures placed monthly intake at approximately 84.44 million litres by June 2026, while Kenya Dairy Board data cited in September showed deliveries falling further to 81.3 million litres in July.

Prolonged dry conditions have reduced pasture and pushed up the cost of fodder and commercial animal feed.

When farmers cannot feed cattle adequately, milk yields fall.

Keeping production stable then becomes more expensive, particularly for smallholders who rely on purchased feed during dry periods.

The government has ruled out foot-and-mouth disease as the main explanation for the current shortage, pointing instead to the feed and rainfall pressures affecting dairy production.

Why is milk running out?

Formal processors depend on a steady supply of raw milk collected from farms and dairy cooperatives.

The milk must be gathered, transported and chilled before processing, then pasteurised or treated for longer shelf life, packaged and distributed to retailers.

When less raw milk arrives at factories, processors have fewer litres to allocate across their product lines and retail networks.

Some supermarkets in Nairobi have reported empty fresh-milk shelves before midday, while other outlets have limited customers to two or three packets.

The disruption has also affected milk ATMs and neighbourhood shops.

A spot check reported by The Star on October 9 found raw milk selling for more than Sh90 per litre where available, while some packaged brands were priced around Sh135 per packet.

Less familiar brands were available in some shops at about Sh80.

Those figures are observations from particular outlets, not a uniform national retail price.

Packet sizes, brands, processing methods and locations differ.

What does the farmer get?

Retail prices are only the final stage of the dairy chain.

At the farm gate, farmers sell raw milk to cooperatives, collection centres, processors or direct customers.

The price they receive depends on the buyer, the quality of the milk, the terms of the purchasing arrangement and the market at the time.

Strathmore University’s SAFIC AgriIntel price tracker, using Ministry of Agriculture market data, recorded a median price of Sh81.25 per litre at collection points in September 2026, up from Sh72.50 in August across the reporting markets.

The same tracker recorded a median of Sh145 for processed cow’s milk in a narrower set of markets.

That series covers a different stage of the supply chain and should not be compared with the collection-point price as though the products were identical.

Between farm and shelf, milk must be collected, cooled, tested, processed, packaged, transported and stocked.

These operations carry costs, and processors and retailers must also cover their overheads.

A higher price paid to a farmer therefore does not translate automatically into an identical increase at the supermarket.

Panic buying adds pressure

Kagwe has also warned that some consumers are bypassing shops and buying directly from farms after hearing about shortages.

That can divert milk away from processors, reducing the volume available for packaged products.

Households worried about finding milk have also started buying several packets at once.

When supplies are already tight, stockpiling can empty shelves faster and make the shortage appear worse.

The Consumers Federation of Kenya has criticised the handling of the crisis, citing feed costs and the lack of sufficient strategic reserves.

It has called for measures to lower input costs, including relief on imported feed ingredients.

When will supply improve?

The government expects improved rainfall to restore pasture and help stabilise milk production.

But rainfall alone will not resolve all the pressures facing dairy farmers.

Feed costs, the availability of fodder, farm productivity, collection infrastructure and the price paid for raw milk will continue to affect how much milk reaches factories.

Kenya’s dairy industry has more than 30 licensed processors and dozens of mini-dairies, according to the Kenya Dairy Board.

The sector has substantial capacity, but processing facilities cannot package milk that never arrives.

For consumers, the immediate effect is familiar: fewer brands on shelves and a higher grocery bill.

For farmers, the concern is whether production costs and the price received for milk leave enough to sustain their herds.