Nestle’s review raises concern in dairy sector

Nestle's ongoing review of its dairy and juice operations in Trinidad and Tobago has sparked significant concern throughout the local agricultural sector. Stakeholders fear that any alteration to the company's current operations could have profound and far-reaching consequences for the nation's farmers and related businesses.

The multinational food giant confirmed it is exploring options for its product portfolio in the twin-island nation as part of a wider global strategic realignment. Brands such as Orchard juices and Proud Land milk are reportedly among those that could be affected. However, Nestle has not confirmed an exit from the dairy sector or a cessation of local milk purchases.

Agricultural analyst Dr. Donny Rogers expressed alarm over the uncertainty, emphasizing the sector's reliance on stable off-take agreements for locally produced milk. He warned that a discontinuation of current purchasing arrangements would immediately impact approximately 60 farmers, over 400 dependents, and about 125 laborers, with many more affected indirectly. The dairy industry's influence extends across the agricultural value chain, supporting input suppliers, technical service providers, feed depots, veterinarians, and insemination technicians.

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this discontinuation will have an immediate negative effect on 60 farmers, over 400 dependents, approximately 125 labourers and many more indirectly.

Rogers further cautioned that instability in local milk procurement could disrupt downstream industries, including food processors and retailers, affecting both price and availability. He estimated that the dairy sector contributes around $7 million in gross revenues to National Flour Mills, a government entity producing animal feed. Beyond economic concerns, a reduction in local milk purchasing could exacerbate Trinidad and Tobago's reliance on imported dairy products, which already account for approximately $300 million in milk and $750 million in dairy products annually, placing additional strain on foreign exchange reserves.

The potential impact also touches on cultural and social aspects. Dairy farming traditions hold long-standing cultural attachments in Trinidad and Tobago. Rogers noted that the closure or significant restructuring of the industry could lead to the erosion of these traditions, particularly impacting the country's large Hindu population and its farmers, as the majority of cows are considered sacred.

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Already, T&T imports approximately $300 million in milk and close to $750 million in dairy products. This move will add significantly to that category of food being imported and will place additional strain on forex availability in this regard.