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This study was made with the purposes of characterizing milk supply and marketing chains, post-production losses of milk, and evaluating the potential of supply chain management approach to reduce milk losses in Ethiopia. Primary data were collected by semi-structured survey questionnaire and interview of key informants. The collected data were analyzed using SPSS and Microsoft Excel sheets. Mapping, characterizations, and descriptive statistics were used to analyze the collected data. Both quantitative and qualitative-narrative methods were used in analysis. The finding revealed that farmers, cooperatives/unions, traders, and catering institutions were the major chain actors in milk chain in the study area. With 73% of milk sold by farmers passing through cooperatives/unions to the next chain actors, cooperatives/unions were the focal firms in this supply chain. Production was characterized by smallholders with few numbers of cows and low productivity of milk per cow per day. Cow breed and lack of access to credit were identified as critical resource and the most constraint that hinder production improvement. Marketing relationships among the chain actors were characterized as lacking long-term market orientation and were mostly on the spot and transaction based. The assessment on the enabling environment indicated further need of support from governmental and non-governmental stakeholders to build the capacity of chain actors, particularly the farmers. The study indicated existence of significant amount of milk losses in the milk chain. With 39% of the total losses happening at cooperatives/ union stage, cooperatives/unions were identified as loss hotspot point in the chain. Poor milk handling practice at the collection points, lack of immediate acceptors, milk carrying tools used, means of transport used, and ineffective communication with other partner in the chain were identified in order of severity as important problems causing milk losses in the study area. Based on the study results and review of others’ work in similar contexts, this study argued for SCM to be part of solution in improving this dairy chain. The study showed cases where effectively implemented SCM approach converted dairy chains from chains characterized by dismantled, high conflicts of interests among the chain actors, and high losses of food in the chain to chains with mutual interest trying to maximize the profit to the whole chain actors. Integrated and collective actions by all chain actors aiming at reducing costs, improving quality, and minimizing food losses in the chain were central to these efforts. Therefore, SCM approach needs to be part of the solution in increasing profitability and reducing milk losses in Ethiopia in general and in the study area in particular. However, the needs for detailed further study, some of which are recommended by this study, are worthwhile.

Characterizing Milk Supply and Marketing Chains and Losses in Wolmera and Ejere Districts of Ethiopia