Chief Economic Adviser David Ndii has attributed supermarket stockouts of milk in Kenya to a sharp rise in domestic consumer demand rather than a drop in supply. Speaking at the 2026 NCBA Economic Forum in Nairobi on Tuesday, November 3, Ndii explained that the country's milk output has expanded significantly under the current administration. He cited the workforce driving the nation's infrastructure boom, specifically workers at government affordable housing projects, as a key factor in the increased demand.
Ndii pointed to the construction sites of government affordable housing projects, where workers are consuming higher quantities of dairy products. He noted that contractors now routinely provide milk alongside daily rations to sustain laborers on site. According to Ndii, this shift in consumption patterns is putting unprecedented pressure on retail supply chains. The increased demand is not limited to the construction sector, with Ndii suggesting that other segments of the population are also driving up milk consumption.
Citing official data from the Kenya National Bureau of Statistics (KNBS), Ndii revealed that annual milk production has jumped 20 percent since the current administration took office, reaching an estimated 5.6 billion liters per year. This increase is significant, with Ndii stating that it is more milk than 90 percent of the countries in Africa produce. Commercial processing figures also mirror this surge, with milk processors seeing intake rise 34 percent, from approximately 500 million liters in 2022 to one billion liters last year.
Despite recent weather challenges, milk intake by processors during the first eight months of 2026 remained virtually identical to the same period in 2025. Ndii attributed the retail inventory gaps to market demand outpacing supply chain delivery, rather than a reduction in supply. He emphasized that the increase in production and intake by processors cannot explain the stockouts on supermarket shelves, leaving demand as the only plausible explanation.
The dairy sector is a significant contributor to Kenya's economy, with Ndii estimating that total annual production yields nearly Ksh400 billion at current farm-gate prices. High demand for quality livestock has driven prices for top-tier dairy heifers to between Ksh300,000 and Ksh350,000. Kenya continues to import high-yield breeds from South Africa and the Netherlands, while exporting livestock across Africa.
Ndii also highlighted the need for updated statistical models to accurately reflect fast-growing, non-traditional sectors across the country. He confirmed ongoing discussions with KNBS to address statistical gaps and improve the accuracy of economic reporting. The dairy industry's economic footprint is substantial, and Ndii's analysis suggests that the sector will continue to play a vital role in Kenya's economy.
Ndii's explanation for the milk shortage has significant implications for the dairy industry and Kenya's economy. As the country continues to experience rapid growth and urbanization, the demand for dairy products is likely to remain high. The government's efforts to increase milk production and improve supply chains will be crucial in meeting this demand and ensuring a stable milk supply.
Key points
- Kenya's milk output has increased by 20 percent since the current administration took office, reaching an estimated 5.6 billion liters per year.
- The dairy sector generates nearly Ksh400 billion annually for the economy.
- High demand for dairy products is driven by the workforce driving the nation's infrastructure boom, including workers at government affordable housing projects.
