Kenya’s dairy industry faces numerous challenges that impact its growth, sustainability, and competitiveness. The cost of animal feed raw materials poses the main challenge to farmers, with stakeholders calling on the government to address it. According to the Githunguri Dairy Farmers Co-operative Society management committee, led by Chairman John Mungai, the overall business environment in the country is challenging, with resultant effects on dairy products.
The farmers’ society is the largest and best-managed dairy facility in East and Central Africa. The chairman says the society’s strategic focus is enhancing revenue growth whilst maintaining growth and advised other dairy societies across the country to follow suit to remain afloat despite hard economic and market conditions. “In addition to the business risks discussed above, we are exposed to a number of other risks including credit risk, cash flow, foreign currency, and liquidity risks,” indicated the management committee during the facility’s Annual General Meeting on Friday, October 18, 2025.
However, he optimistically says that players in the industry are in a position to turn around the hurdles by embracing value addition. “Despite all the challenges the dairy sector is encountering, players should embrace value addition of their product to generate extra income,” he advised. Our research established that climate change, with droughts, erratic rainfall, and rising temperatures, affects fodder production, leading to feed shortages and lower milk yields.
Economic challenges, with fluctuating milk prices, high production costs, and limited access to credit, hinder farmers’ ability to invest in their farms. Poor roads, inadequate infrastructure, and limited access to modern farming technology increase milk spoilage and reduce farmers’ incomes. “Livestock diseases such as mastitis, foot-and-mouth disease, and poor breeding practices compromise animal health and productivity,” said Nelson Mwicigi, a farmer from Githunguri.
Though Githunguri Dairy Farmers Co-operative, whose dairy brand is Fresha, enjoys steady and uninterrupted milk supply, hundreds of other facilities encounter limited market access, inconsistent milk supply, and lack of value addition opportunities, affecting farmers’ incomes and industry competitiveness. Farmers’ limited knowledge and skills in modern dairy farming practices, business management, and market trends also hinder the dairy industry’s growth.
The sector, which, if well-organized and managed, can be an employer to millions of Kenyans, is dogged by inconsistent policy enforcement, inadequate guidance for small-scale farmers, and lack of support for sustainable practices. These challenges result in low milk yields, affecting the country’s ability to meet domestic demand. The industry’s inability to meet domestic demand contributes to food insecurity and reliance on imports, leading to significant economic losses for farmers, processors, and the broader economy.
