The Kenya Dairy Board puts the cost of producing one litre of milk at roughly KSH 30–37, depending on your farming system and scale. Feed is consistently the single biggest driver of that cost, especially for zero-grazing farms that buy in everything their cows eat.
Where the money actually goes
On a typical small Kenyan dairy farm, costs break down roughly into: feed (the largest share by far, particularly under zero-grazing), labour, veterinary and health care, water, electricity, and housing or equipment. Farmers consistently report that feed alone can make the difference between a comfortable margin and barely breaking even.
As one Kiambu dairy farmer put it in 2026: "Feeds are extremely expensive and yet milk prices are not increasing at the same rate. Sometimes you barely break even after paying for feeds, labour, water and veterinary services."
Why costs have been rising
Feed prices have climbed faster than milk prices in recent years, squeezing the margin from both sides. The government has responded with a few interventions worth knowing about: leasing public land for large-scale maize and soya production to bring feed costs down, duty-free importation of milk powder processing equipment to help stabilise prices during periods of oversupply, and a continuing rollout of solar-powered milk coolers to cut post-harvest losses and electricity costs for farmers.
Where the margin actually sits
Even with costs around KSH 30–37 per litre, farmers managing well are seeing profit of roughly KSH 10–14 per litre — a real but thin margin that leaves little room for waste. That's the core argument for tracking costs precisely rather than estimating: a small, unnoticed leak (overfeeding a low-yield cow, an untracked vet bill, wasted feed) can quietly erase the entire margin on a chunk of your herd.
What to track if you want your real cost per litre
Four things, at minimum: total feed spend against total litres produced, labour cost, veterinary spend tagged to specific animals where possible, and a fair share of water/power/housing. Once you have all four for a month, dividing total cost by total litres gives your actual cost per litre — which you can then compare to what your buyer pays.
How Lita helps
Every expense you log rolls into an automatic monthly profit & loss, so you always know your real cost per litre — not a rough guess at the end of the year.
Start your 14-day free trialQuestions farmers ask
Is dairy farming still profitable in Kenya?
For many farmers, yes, but the margin is thin — often around KSH 10-14 profit per litre after costs. Farmers who track their numbers closely tend to stay profitable; those who don't often only discover a loss after it's already happened.
What is the biggest cost on a dairy farm in Kenya?
Feed, by a wide margin — especially for zero-grazing systems where animals rely entirely on purchased feed rather than pasture.
How can I lower my dairy farm's feed costs?
Common approaches include growing more of your own fodder instead of buying all feed, buying feed in bulk with neighbouring farmers, and tracking feed-to-yield per cow so you're not overfeeding low producers.
Source: Kenya Dairy Board figures and farmer interviews as reported in The Star, "High cost of feed pushes up milk production costs for dairy farmers," 26 May 2026.