Investment on Dairy Husbandry
Dairy farming is a strategic enterprise in Uganda that provides household food security and daily incomes to a large population. To plan for improved dairy production, advisors and extension workers need to guide farmers on improved dairy husbandry practices for profitable dairy farming. Dairy farming is practiced under three main systems. Intensive, semi-intensive, and extensive. The vast majority of milk in Uganda is produced by smallholder farmers.
According to Dairy Development Authority (DDA), in October 2018, annual national milk output stood at 2.2 billion liters, up from 1.8 billion liters annually, as of July 2012. As of 2017, per capita, milk consumption in Uganda stood at 62 liters, up from 25 liters in 1986. 80 percent of the milk produced is marketed while 20 percent is consumed by farming households. 33 percent of the marketed milk is processed, while 67 percent is sold as raw milk.
By June 2019, annual milk production in the country had risen to 2.4 billion liters, with export earnings from the sector, bringing in US$100 million per year.
Gross margins by dairy farmers per animal under different Production Technologies
Note: The Cost Estimations was as per the year 2014
| Input Cost /Vet services |
High Costs in (UGX) |
Low Costs in (UGX) |
Traditional |
| Salt | 8,382 | 8,382 | – |
| Supplementary feeds | 369,090 | – | – |
| De-worming | 6,647 | 6,647 | 2,372 |
| Dehorning | 3,135 | 3,135 | – |
| Castration | 1,604 | 1,604 | – |
| Animal treatment / Injectables | 6,750 | 6,750 | 5,717 |
| Spraying | 13,526 | 13,526 | 4,588 |
| Vaccination | 4,258 | 4,258 | 600 |
| Total Input / Vet Services | 413,393 | 44,303 | 13,277 |
| Labor | – | – | – |
| Weeding Pastures | 11,224 | 11,224 | |
| Fence Maintenance | 9,061 | 9,061 | |
| Hired Labor | 12,680 | 12,680 | 10,933 |
| Total Labor Costs | 32,965 | 32,965 | 10,933 |
| Total Variable Cost | 446,357 | 77,267 | 24,120 |
| Average yield (TY) Litres | 2,472 | 1,410 | 504 |
| Average price (Ug shs) | 800 | 800 | 800 |
| Total revenue TR | 1,977,600 | 1,128,000 | 403,200 |
| Gross Margin (TR – TVC) | 1,531,243 | 1,083,697 | 378,990 |
| Benefit – Cost – Ratio (TR/TVC) | 4 | 26 | 17 |
| Unit Cost of production (TVC /TY) | 181 | 32 | 48 |
| Marginal returns on investment (Unit price – Unit cost of production) | 619 | 769 | 752 |
High Input:
- Uses Exotic Breeds
- Sprays animal regularly
- Supplementary feeding to animals
- Controlled grazing (Paddocks)
- Uses of veterinary services (AI, Vaccination and administration of drugs)
Low Input
- Uses cross breeds
- Spraying of animals
- Use of paddocks or zero grazing
- Moderate use of veterinary services like treatment of animals and administration of drugs
Traditional Input
- Mostly uses local breeds
- No or intermittent spraying
- Practices communal grazing
- Minimal or no treatment of animals