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Producer-dairy coop - milk transporter-processor-retailer-consumer 4 The number of intermediaries involved will have a bearing on both producer and consumer milk prices.
The shorter the channel the more likely that the consumer prices will be low and the producer will get a higher return. A notable omission in the milk marketing channel obtaining in Kenya is the absence of wholesalers.
Retailers obtain their dairy products directly from processors. From the consumer point of view, the shorter the marketing chain, the more likely is the retail price going to be low and affordable.
This explains why, following the liberalisation of the dairy industry, direct sales of raw milk from producers to consumers channel 1 or through hawkers channel 2 has been on the increase despite the public health risks associated with the consumption of untreated milk and milk products.
Milk producers may not necessarily benefit from a short marketing chain i. However, farmers sometimes prefer selling milk to hawkers because other factors such as prompt payments and inaccessibility to formal market outlets such as producer co-operatives or lack of near by milk processing factory.
The biggest disadvantage of direct milk sales to consumers by hawkers is the total lack of quality control and the frequent rate of adulteration of milk with dirty water, which is illegal. Marketing and Pricing of Milk and Milk Products The price of a product in the market is an important factor influencing consumer demand.
Hence to be marketable, a dairy product must be competitively priced. This implies that the costs involved in raw material procurement, processing, packaging, storage, marketing and distribution must be kept as low as possible.
Cost of raw milk Cost of raw milk collection and transportation Cost of processing Cost of marketing and distribution Taxes and tariffs Profit margins at each stage of the marketing channel Collection, Processing and marketing margins In order to arrive at a realistic costing of a product, all those elements involved at each stage must be carefully calculated on a unit basis.
This is known as Cost Accounting. The table below shows some of the essential cost elements:Behavioural changes in dairy cows with lameness in an automatic milking system.
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