RENEW Strategies

Industry Profile: The Dairy Industry

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Lulit Negash
| May 15, 2014

Ethiopia seems to have significant potential for dairy development due to its large livestock population (10 million cattle produce meat and milk), favorable climate for improved, high-yielding animal breeds, and relatively disease-free environment. Despite having the largest livestock population in Africa, Ethiopia’s milk production is relatively low. Additionally, increasing demand for milk and milk products from a growing population offers an opportunity for milk producers and processing cooperatives to increase productivity.*

Even though the general milk production and consumption in the country is still minimal, the milk market networks seem to be improving in the past few years. Findings showed that milk cooperatives were the dominant milk buyers from producers. Recently, milk cooperatives have been increasing in number in Ethiopia.*

The dairy sector in Ethiopia seems to be characterized by the transition towards a market-oriented economy and appears to be moving towards a takeoff stage. Consumers are also getting the products at their doors or in shops specialized in supplying dairy products. Cooperatives and unions established for these purposes are playing a crucial role in changing the marketing landscape of the sector.*

This shift towards a market economy is creating large opportunities for private investment in urban and semi-urban dairying. As a result, significant development interventions for the industry aimed at addressing both technological gaps and marketing problems are being practiced in the country. Other factors also support the promotion of private investment to introduce new technology in the sector including improved genotypes, feed and processing, and integration of crossbred cattle into the smallholder sector.*

The dairy sector in Ethiopia is expected to continue to grow over the next decade as the growth in demand for dairy products increases.

*The New Agriculturist, Boosting Ethiopia’s small-scale dairy industry, August 2011
*ILRI, Sustainable Livestock Digest, Diary intensification and milk market quality in Amhara Region, Ethiopia, December 2011
*Ethiopian Business Review, Milk Market New Actors In the Milk Supply Chain Are Changing The Market For Good 2013-2014
*International Food Policy Research Institute, Dairy Development in Ethiopia, October 2004