Samenvatting

This study was conducted to examine and analyse the cost of producing 1 kg of milk between the Netherlands and Kenya. Whereas farmers work to better their profitability, they are faced with challenges in balancing their resources used in farm production and the end result of production. Due to this, the study sought to establish a well calculated cost price which has been lacking in some cases. The study was conducted by a descriptive survey design and corroborated by Cross Sectional data from LEI FADN which is carried out in the Netherlands on commercial farms annually, data being collected during the period of 14th April to 02nd June 2014 at various cooperatives in Kenya; using a questionnaire and interview responses from 34 randomly selected farmers who are members of dairy cooperatives. The data were compiled in an excel sheet and analysed using Gross margin analysis. The results indicate an estimated cost price of KSH 32 (€ 0.38) and KSH 24 (€ 0.28) per kg in the Netherlands and Kenya respectively. The differences are brought due to the high labour costs in the Netherlands and additional ‘other’ costs representing audit fees, taxes and overhead costs. The study concludes that the cost of producing 1kg of milk in the Netherlands is relatively higher than Kenya. However, dairy farming is more profitable in the Netherlands in comparison with Kenya due higher economies of scale and a higher milk production per cow. It recommends that farmers should practice better feed efficiency. This is possible with provision of dairy information and good feed management. Farmers need to develop a Farm Management Audit - using a ‘Checklist’ which will serve to determine management opportunities for dairy farms. This should be done with the help of extension officers.