South Africa's dairy industry is rated highly competitive

South Africa's dairy industry has been ranked among the most competitive in the world in the 2025 IFCN Dairy Report. With relatively low production costs, strong productivity, and large herd sizes, local producers are well positioned to compete in international markets despite ongoing challenges such as rising input costs and declining farm numbers. Lindi Botha reports.

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South Africa's dairy industry has come out tops in the 2025 International Farm Comparison Network (IFCN) Dairy Report. With of the lowest production costs and high levels of productivity, the local industry is highly rated in terms of competitiveness. A total of 174 farms across 66 dairy regions in 55 countries participated in the study. These countries collectively represented approximately 91% of total global dairy production.

South Africa ranked among the lowest-cost milk producers globally, averaging around R325,13 to R488 to produce 100kg of solid corrected milk (SCM).

This figure did however increase to around R650 on farms that had a lower percentage of pasture-based herds.

On the other end of the scale, high-cost producers, which made up 17% of the farmers surveyed, faced costs of more than R976/100kg of SCM.

These farms were primarily located in the Alpine region, Canada, Israel, Iran, and selected parts of Asia.

Labour typically represented the second-largest share of total unprocessed milk production costs, ranging from 5% to 52%. The lowest labour costs were observed in South Africa (less than R49/h), while the highest were recorded in Peru (more than R195/h). On average, labour accounted for 19% of the total cost of unprocessed milk production.