Kenya’s dairy farmers are producing more milk than ever before, and the numbers to prove it are finally here. Fresh milk production hit 5.5 million tonnes in 2025, a 3.5% increase from the previous year and the third consecutive record, according to the Kenya National Bureau of Statistics (KNBS) Economic Survey 2026 released on April 30, 2026.
The report highlights a major structural shift in the sector. For the first time, formal milk intake by industrial processors crossed the 1 billion litre mark, rising 11.5% from 909 million litres in 2024.
The growth reflects a steady migration from informal milk hawking to formal cooperative channels, driven by predictable payout structures and a government ban on powdered milk imports enacted in October 2025.
The production gains have been underpinned by targeted financial interventions. The government disbursed Ksh 300 million to clear four months of arrears owed to over 10,000 farmers in the Rift Valley and Trans Nzoia regions, a move the Kenya National Farmers Federation (KENAFF) said was critical in preventing a collapse of the sector. Delayed payments in late 2025 had left cooperatives unable to fund animal feeds and veterinary services.
A further Ksh 2.4 billion government grant, reflected in New Kenya Cooperative Creameries (New KCC) financial filings released on May 10, 2026, has since restored farmer confidence and kept the modernization agenda on course.
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Despite the record output, New KCC is currently operating at roughly 70% of its intake target. The processor posted a net loss of Ksh 953 million in the last financial year, attributed to high finance costs and overdue trade payables, even as it implements a presidential directive to pay farmers Ksh 50 per litre.
The Ministry of Cooperatives has identified expanded cooling and bulking infrastructure in counties including Vihiga and Kajiado as a priority under the dairy development strategy, which targets a doubling of daily yields to 14 litres per cow by 2027.
The 2026 Economic Survey makes clear that supply and farmer participation are no longer the primary constraints facing the sector. The next phase of growth will depend on whether processors, particularly New KCC, can efficiently absorb, process, and pay for the milk that cooperative farmers are already delivering.
By Benedict Aoya
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