The dairy industry in Uganda is a source of day-to-day earnings and food for a considerable proportion of the population in the country. It is mainly saturated by smallholder farmers predominantly residing in rural areas, with only one-fifth of the milk produced undergoing value addition.

“The dairy sector currently brings in the second-highest export earnings after coffee in the agricultural sector and is gradually paving its way to the number one position.” The sector is currently valued at US $3.8 billion according to statistics. Production of milk increased from sh2.51b litres to approximately sh3.85b litres between 2018 and 2022, an average annual growth rate of 11%, which is among the highest of any sector in the Ugandan economy.

Processed milk exports include UHT milk, whey, powdered milk and many more to countries like Bangladesh, Oman, UAE, USA, Japan, Nepal and Syria. More recently, the government of Uganda agreed a deal with Algeria that will see the country export milk products worth US$500 million to the North African nation.

As of August 2023, the national average farm gate price of milk stood at Ush1,244 while the retail price reached Ush1,871 with the highest prices registered in the North Eastern region of the country. Milk products exported during the year 2019/20 accounted for 42% of the overall exports of agricultural products with the capacity of milk production amounting to 2.81 billion litres, 0.19 billion litres shy of the forecasted 3 billion litres.

The shortfall was attributed to the extended dry season that befell the northern regions of the country and pandemic resultant events that interrupted the production of milk in other regions of the country. As of September 2023, Uganda’s milk production amounted to 3.85 billion litres.