Sri Lanka’s national milk output tumbles in 2019

• Closure of several large-scale farms, foot and mouth disease main reasons 
• However, DAPH and DCS come up with different production figures 
• Both milk imports and exports and milk products increase in 2019

By Nishel Fernando 
Sri Lanka’s national milk output tumbled in 2019 amid an outbreak of foot and mouth disease in certain parts of the country and closure of several large-scale farms operating with imported cows, leading to an increase in cost of production and lower profit margins for farmers with no improvement in quality. 

According to the Department of Animal Production and Health (DAPH), Sri Lanka’s national milk production came down by 14.2 percent year-on-year (YoY) to 424.13 million litres in 2019.
However, as per Department of Census and Statistics (DCS) data, Sri Lanka’s national milk production declined by 6.3 percent (YoY) to 448 million litres in 2019.

Speaking to Mirror Business, DAPH Acting Director General Dr. R. Hettiarachchi said that DAPH held discussions with the officials of Agriculture and Environment Statistics Division of DCS on the differences in numbers.

According to her, the DCS collect the milk production data on a particular day through Samurdhi employees and Development Officers and calculate the annual output based on such data. “Practically, we can’t calculate the annual production from monthly or daily averages, as the industry has seasonal variations,” she pointed out.

She noted that this issue was raised during the discussions with DCS officials and DAPH was under the impression that DCS would use the more accurate figures provided by DAPH instead of using their own figures.

Meanwhile, Kotmale Holdings PLC, a leading dairy company owned by the Cargills group said the decline in milk production in 2019 was mainly due to an outbreak of foot and mouth disease. “This decline is mainly attributable to the outbreak of foot and mouth disease during the latter half of the year,” Kotmale Holdings PLC told its shareholders in its 2019/2020 annual report. 

There were reports of outbreaks of foot-and-mouth disease in the North Western Province in 2019. However, Dr. Hettiarachchi offered a different opinion for the decline in milk production while disagreeing with opinion that foot-and-mouth disease was the main reason for the decline. 

“There is no single reason. The foot and mouth disease didn’t adversely impact the sector during last two years compared to 2013 and 2014. The main reason, I would say is the closure of several mega farms during the year, which were in operations in 2018, with high yielding imported animals,” she elaborated.  

As per Kotmale Holdings, the national average cost of production of milk increased by 7.2 percent YoY in 2019, although the quality of milk didn’t improve.

The increase in cost of production has also resulted in a lower profit margin for farmers despite an increase of 4.6 percent YoY in the average farm gate price in the year. 
During 2019, both milk imports and exports and milk products increased.

According to DAPH, Sri Lanka exported Rs.543 million worth milk and milk products in 2019, up from Rs.460 million in 2018. Condensed milk was the largest export item contributing to over half of the dairy export revenue in the year. 

The import expenditure on dairy products rose to Rs 55.6 billion in 2019 from Rs.54 billion in 2018.  Amid the decline in local milk production, per-capita availability of milk declined to 52.16 Kg per person in 2019 from 58.03 Kg per person in 2018.