#1The presentation to SASDT on 24 March 2022 titled: "OVERVIEW OF THE SOUTH AFRICAN DAIRY INDUSTRY" By the CEO of SAMPRO, based on the research reports compiled by the Office of SAMPRO CONTENT 1. The key characteristics of the South African Primary and Secondary Dairy Industries 2. The Performance of the International Dairy Industry 3. The Performance of South African Primary Dairy Industry 4. The Performance of the South African Secondary Dairy Industry 5. The Challenges for the South African Dairy Industry#21. The key characteristics of the South African primary and secondary dairy industries are: Market-orientated and not production-orientated; Structure, driven by competition (more competitive enterprises grow at the expense of the less competitive enterprises); Dynamic (new technologies, knowledge and changing needs of consumers); Complex (different scientific fields of knowledge); Demanding (24 hours, 365 days per year and knowledge intensive); Critical daily dependence on service delivery by public sector at national, provincial and local authority levels (roads, electricity, water, security, inspection services, prevention and control of animal diseases); Producers of unprocessed milk not a homogeneous group (pasture-based or total-mixed-rations, dry land or irrigated pastures and crops for silage and hay, geographical location, climate region, management and monitoring of individual animals, different breeds, breeding, soil, water, seasonality of production, composition of unprocessed milk, involvement in complementary production); 2#3Processors (producers of processed milk and the manufacturers of the other dairy products) not a homogeneous group (product range, reputation of brand name, technology, exposure to foreign competition, geographical location); Different dairy products perform differently in markets; SA dairy products not entitled to enjoy a share in consumer spending and competes with imported dairy products, plant-based products and unrelated products and services; Environmentally sensitive; Animal welfare sensitive; • Socially responsible; and Issues of collective interest, are dealt with through the organised dairy industry. 3#4Oversimplified and distorted views about the SA dairy industry exist and it originates from: Production-orientated approach; Selective use of information; Lack of knowledge; and Ideologically informed points of departure. 4#51. * Oversimplified and distorted views result in unfounded conclusions; One unfounded conclusion is that the reduction in the number of producers of unprocessed milk, is an unique SA phenomena. Table 1 shows that it is not. Table 1 REDUCTION OF THE NUMBER OF DAIRY FARMS IN PARTICULAR COUNTRIES¹) Number of farms ('000) Percentage Percentage Percentage of Country Ranking2) production 1996 2018 processed reduction of number of dairy farms 1996 to increase in production 1996 to 2018 2018 USA 2 100 131.0 39.0 70.23 47.55 EU 2 93 4 836.0 1 139.0 76.45 12.27 Brazil Germany 45 72 1 819.0 962.0 46.85 93.06 5 96 1 860.0 62.8 66.24 12.21 New Zealand 7 100 14.7 12.0 18.37 111.86 France 8 98 141.0 56.0 60.28 -0.88 UK 11 98 34.6 12.8 63.01 7.33 Netherlands 12 99 39.0 17.0 56.41 25.40 Italy 14 90 109.0 31.0 71.56 28.35 Mexico 15 75 119.0 92.0 22.69 58.23 Argentina 17 90 20.0 11.0 45.00 24.26 Canada 18 97 23.8 10.6 55.46 33.19 Australia 19 97 13.9 5.7 58.99 2.10 Ireland 24 95 23.23) 16.2 30.17 65.19 Japan 26 99 41.6 15.7 62.26 -13.83 Belarus 27 87 684.0 50.0 92.69 57.38 Spain 28 99 124.0 14.0 88.71 21.31 Denmark 30 95 14.8 2.8 81.08 25.46 Belgium 36 99 20.7 11.4 44.93 35.35 Switzerland 37 90 30.0 20.0 33.33 4.99 South Africa 39 95 8.0 1.4 82.50 80.86 Sweden 42 92 15.9 3.5 77.99 -15.88 Finland 47 98 30.0 6.5 78.33 1.61 Uruguay 50 94 Portugal 57 97 5.86 48.0 3.28 44.03 81.58 4.6 90.42 8.93 Table prepared by the Office of SAMPRO, based on information contained in the IFCN Dairy Reports of 2019 and 2020. Countries selected are countries in which the bulk of the unprocessed milk produced, is used for the production of processed milk and the manufacture of the other dairy products. 23 2. Ranking in terms of size of production of unprocessed milk relative to other countries. 3. Ireland: Information available from 2002 only and the figure of 23.2 shown in the 1996 column, is the figure of 2002. 5#6• Second example of a unfounded conclusion, is the view that the SA Secondary Dairy Industry, is too concentrated which is as shown in Table 2, not the case Table 2 SHARE OF THE LARGEST MILK PROCESSORS (PRODUCERS OF PROCESSED MILK AND MANUFACTURERS OF THE OTHER DAIRY PRODUCTS) IN THE PURCHASING OF UNPROCESSED MILK IN PARTICULAR COUNTRIES4) COUNTRY Argentina SHARE OF THE THREE LARGEST SHARE OF THE SEVEN LARGEST MILK PROCESSORS (percent) MILK PROCESSORS (percent) 31 45 Austria 59 82 Belarus 28 46 Brazil 13 24 Chili 24 40 Colombia 48 67 Denmark 95 100 Finland 83 90 France 50 68 Germany 39 57 India 45 60 Israel 95 100 Japan 41 59 Madagascar 100 100 Morocco 76 94 New Zealand 94 100 Norway 100 100 Paraguay 70 83 Peru 93 97 Rwanda 30 39 South Africa 37.5 63 Sweden 92 100 Switzerland 50 68 Tunisia 25 39 Uganda 51 67 4) Table prepared by the Office of SAMPRO, based on: United Kingdom Uruguay Average 47 59 88 100 59 72 Information obtained from the 2020 annual report of the International Farm Comparison Network (IFCN), and 7 The information in respect of South Africa obtained from the report of the Competition Commission titled "Measuring Concentration and participation in the South African Economy: Levels and Trends, Main Report, November 2021"#7Third example is the view that the gap between the price of unprocessed milk and the prices of dairy products, is increasing, which is, as will be shown later, not the case; and A fourth example is that the movements of the price of fresh milk, which is one of the different types of dairy products, is used to make conclusions about the whole dairy industry. Obviously, such position is not rational as more unprocessed milk is used for the production of the other dairy products than for the production of fresh milk. 8#85) 2. THE PERFORMANCE OF THE INTERNATIONAL DAIRY INDUSTRY Up to before the Russian invasion of Ukraine at the end of February 2022, the prices of dairy products in the international market and the prices of unprocessed milk in major dairy countries, were moving upward as shown in Graph 1, Graph 2 and Graph 3. Graph 15) PRICE INDEX OF DAIRY PRODUCTS IN THE INTERNATIONAL MARKET UP TO FEBRUARY 2022, AS PUBLISHED BY THE FAO 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 Information as published by the Food and Agricultural Organization (FAO) of the United Nations. Graph prepared by the Office of SAMPRO based on information published by the FAO. FAO Dairy Price Index 2014-2016-100 9#91000 2014 Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2000 2014 Nov 2014 Dec 2015 Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov Butter 6. Graph prepared by the Office of SAMPRO based on information published by the USDA on 23 February 2022. 3000 2015 Dec 2016 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct Cheddar Cheese 4000 2016 Nov 2016 Dec 2017 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 2017 2018 Jan Nov Dec 5000 2018 Feb 2018 Mar Full cream milk powder 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2019 Jan 2019 Feb Skimmed milk powder. 10 6000 2019 Mar 2019 Apr 2019 May 2019 Jun 2019 Jul 2019 Aug 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2020 Jan 2020 Feb 2020 Mar 2020 Apr 2020 May 2020 Jun 2020 Jul 2020 Aug 2020 Sep 2020 Oct 2020 Nov 2020 Dec 2021 Jan 2021 Feb 2021 Mar 2021 Apr Graph 26) Average Oceania export prices up to January 2022 (USA $/ton f.o.b.) 2021 May 2021 Jun 2021 Jul 2021 Aug 2021 Sep 2021 Oct 2021 Nov 2021 Dec 2022 Jan#10Graph 37 AVERAGE PRICE OF UNPROCESSED MILK IN THE EUROPEAN UNION Milk Prices paid to the Producers EU* (weight. avg.) 42.3 42.0 35.0 34.9 Jan Feb 2019 2020 2021 2022 37.3 36.4 35.2 36.0 35.7 35.8 35.5 Mar Apr May without UK Jun 38.7 40.0 44 42 41.3 40 38 36 34 32 32 February 2022: estimated price 30 Jul Aug Sep Oct Nov Dec Source: Member States Reg. (EU) No 2017/1185 Article 12(a) - Annex II.4(a)) 7) Graph as published by CLAL.it. EUR/100 kg 11#11The Russian invasion of Ukraine and the sanctions implemented by major countries in response to the invasion: Destroyed reasonable expectations based on information available before invasion at end of February 2022; Undermines economic growth in the world; Add to the upward pressure on prices of commodities like crude oil, chemicals, wheat and maize; and Add dramatically to uncertainty about future prices and availability of a wide range of products. 12#12The production of unprocessed milk in South Africa is seasonal. Graph 412) AVERAGE UNPROCESSED MILK PURCHASES PER DAY PER MONTH IN SOUTH AFRICA IN THE YEARS 2015 TO JANUARY 2022 150.00 140.00 132.04 129.36 Total unprocessed milk purchases in South Africa in the years 2015 to January 2022 (Average per day per month) Index: January 2008 = 100 153.61 150.66 151.15 147.23 147.20 147.20 15028 146.87 149.24 145.80 145.5% 143.86 144.25 $142.06 144.88 140.71 140.31 138.97 139.36 139.39 35.25 135.26 134.94 138.15 130.00 129.3 127.81 125.68 123.98 124.22 121.61 124.16 119.75 121.3 120.00 118.55 119.38 118.16119.77 116.89 117 18 10.82 116.52 110.00 133.34 131.4 130.56 131 2 129.95 26.11 115.65 115.29 114.91 114.08 114.09 114.25 113.55 111.12 113.77 110.39 112.32.41 14/62 111.04 110.32 112.77 109.68 110. 108.18 108.69 109.0 110.07 109.38 108.07 108.14 105.95 105.45 107.52 106.21 104.59 104.32 119.63 119.87 131.45 127.96 124.84 100.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2016 2017 2018 2019 2020 -2021 -- 2022 12) Table 4 and Graph 7 prepared by the Office of SAMPRO on the basis of information obtained from MILK SA. The information in respect of 2012 to January 2022, is in respect of the total unprocessed milk purchased by all registered milk buyers declared in terms of Regulation 1652 of the Marketing of Agricultural Products Act and previous similar regulations. The figures for December 2021 and January 2022, are estimated figures. 16#1350.0 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 100.0 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 150.0 Mar-16 May-16 200.0 2012 4.5 2013 2.22 2015 6.32 2016 -0.45 YELLOW MAIZE Index SOYA Index FEED Price Indicator Index Unprocessed Milk (PPI) INCREASE IN UNPROCESSED MILK PURCHASES RELATIVE TO PREVIOUS YEAR (PERCENT)16) 2014 2.65 2017 2018 2019 2020 2021 3.02 4.82 0.65 -0.16 -0.92 བྷཉྷེ 14) 15) Graph prepared by the Office of SAMPRO based on information obtained from Statistics SA and SAFEX middle of the month prices. The Feed price indicator index is an index of prices equal to 70 percent of the maize price, plus 30 percent of the soya price. 16) Table prepared by the Office of SAMPRO based on information obtained from Milk SA and the figure in respect of 2021 is an estimated figure.. Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 250.0 Graph 614) INDICES OF THE PRICES OF UNPROCESSED MILK IN THE PERIOD JANUARY 2012 TO JANUARY 2022 AND THAT OF YELLOW MAIZE AND SOYA AND AN INDEX OF A FEED PRICE INDICATOR 15) IN THE PERIOD JANUARY 2012 TO JANUARY 2022 300.0 Indices of the prices of Unprocessed Milk, Yellow Maize and Soya and an index of a feed price indicator25) Index 2012-100 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22#14Graph 717) FERTILIZER PRICES IN SOUTH AFRICA FROM JANUARY 2007 TO FEBRUARY 2022 21000 19000 17000 15000 13000 11000 9000 7000 5000 3000 MAP KAN / LAN (28) Ureum / Urea (46) Kaliumchloried / Potassium Chloride (grof/granular) 17) Graph published by Grain SA 19#15Table 620) CHANGES IN THE RETAIL SALES QUANTITIES FROM THE YEAR JANUARY 2020 TO DECEMBER 2020, TO THE YEAR JANUARY 2021 TO DECEMBER 2021, AND CHANGES IN THE RETAIL PRICES FROM DECEMBER 2020 TO DECEMBER 2021, OF SPECIFIC DAIRY PRODUCTS CHANGE IN DEMAND CHANGE IN RETAIL PRICES PRODUCT (QUANTITY) PERCENT PERCENT FRESH MILK -6.7 6.1 LONG LIFE MILK (UHT MILK) -4.0 2.5 FLAVOURED MILK 1.1 6.2 YOGHURT -6.0 6.9 MAAS -4.5 6.0 PRE-PACKAGED CHEESE -1.2 5.0 CREAM CHEESE -5.6 6.0 BUTTER -1.1 -3.3 CREAM -4.0 3.8 20) Table prepared by the Office of SAMPRO based on the results of surveys by "NielsenIQ". Non-retail sales such as sales to industrial buyers, are not part of the surveys. 22#16Table 721) CHANGES IN THE QUANTITIES OF RETAIL SALES OF SPECIFIC DAIRY PRODUCTS IN 2020 AND 2021 IN SOUTH AFRICA PRODUCT Sales in the month of December 2021 versus the sales in the month of December 2020 Sales in the 3 months from October 2021 to December 2021 versus the sales in the 3 months from October 2020 to December 2020 Sales in the 6 months from July 2021 to December 2021 versus the sales in the 6 months from July 2020 to December 2020 Sales in the 9 months from April 2021 to December 2021 versus the sales in the 9 months from April 2020 to December 2020 Sales in the 12 months from January 2021 to December 2021 versus the sales in the 12 months from January 2020 to December 2020 percent percent percent Fresh Milk -4.7 -6.5 -7.1 -6.1 -6.7 UHT milk 12.2 6.2 3.2 -3.3 -4.0 Flavoured milk -1.8 -3.6 -1.1 1.2 1.1 Yoghurt -0.5 -4.8 -7.9 -7.9 -6.0 Maas 1.8 0.5 -3.6 -4.8 -4.5 Pre-packaged cheese 2.0 4.2 1.4 -1.3 -1.2 Cream cheese -6.7 -3.1 -4.1 -7.2 -5.6 Butter 13.2 8.7 3.2 -3.9 -1.1 Cream -8.8 -5.1 -5.4 -8.2 -4.0 21) Table prepared by the Office of SAMPRO based on the results of surveys by "NielsenIQ". Non-retail sales such as sales to industrial buyers are not part of the surveys. 23#17Table 822) THE AVERAGE RETAIL PRICES OF SPECIFIC DAIRY PRODUCTS IN DECEMBER 2021, COMPARED TO THE AVERAGE RETAIL PRICES OF THE PRODUCTS CONCERNED IN SPECIFIC PREVIOUS MONTHS OF 2019 AND 2021 December 2021 December 2021 December 2021 December 2021 December 2021 December 2021 versus November PRODUCT 2021 (1 month ago) versus September 2021 versus versus versus versus June 2021 March 2021 December 2020 June 2020 December 2021 versus December 2019 (3 months ago) | (6 months ago) (9 months ago) (12 months ago) (18 months ago) (24 months ago) Percent Percent Percent Percent Percent Percent Percent FRESH MILK 0.1 -0.5 0.5 3.1 6.1 6.7 9.0 UHT MILK 0.1 -1.5 -2.0 2.4 2.5 2.2 7.0 FLAVOURED MILK 6.2 -2.2 -1.2 8.2 6.2 5.7 11.0 YOGHURT -0.01 -1.1 -2.6 2.8 6.9 6.7 9.6 MAAS 2.1 1.4 0.4 2.0 6.0 5.7 5.7 PRE-PACKAGED CHEESE 4.6 2.1 3.1 6.0 5.0 6.9 8.7 CREAM CHEESE 1.7 1.0 0.5 2.2 6.0 9.9 16.1 BUTTER 2.3 -0.9 -2.8 -0.1 -3.3 -1.6 7.4 CREAM 4.1 2.2 2.7 5.5 3.8 6.6 6.0 22) Table prepared by the Office of SAMPRO based on the results of surveys by "NielsenIQ". Non-retail sales such as sales to industrial buyers are not part of the surveys. 24#18Index 230.00 210.00 190.00 170.00 150.00 130.00 110.00 90.00 Jan 2015 Mar 2015 Mei 2015 Jul 2015 Sep 2015 Nov 2015 Graph 1023) THE RETAIL PRICE INDICES (RPI) OF SPECIFIC DAIRY PRODUCTS, FROM JANUARY 2015 TO DECEMBER 2021 Changes in the retail price indices (RPI) of fresh milk, UHT milk, yoghurt, maas, pre-packaged cheese and butter. Index: January 2012 = 100 Jan 2016 Mar 2016 Mei 2016 Jul. 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 Mei 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 Mei 2018 -UHT (RPI) Fresh milk (RPI) -Maas (RPI) 23) Table prepared by the Office of SAMPRO based on the results of surveys by "NielsenIQ". Non-retail sales such as sales to industrial buyers are not part of the surveys. Jul 2018 Sep 2018 Nov 2018 Jan 2019 Mar 2019 Mei 2019 Jul 2019 -Yoghurt (RPI) ww Sep 2019 Nov 2019 Jan 2020 Mar 2020 Mei 2020 Jul 2020 Sep 2020 -Pre-packaged cheese (RPI) -Butter (RPI) Nov 2020 Jan 2021 Mar 2021 Mei 2021 Jul 2021 25 Sep 2021 Nov 2021#19188.00 178.00 168.00 158.00 148.00 138.00 128.00 118.00 108.00 Graph 1124) THE PRODUCER PRICE INDEX (PPI) OF UNPROCESSED MILK, FROM JANUARY 2015 TO JANUARY 2022 AND THE RETAIL PRICE INDICES (RPI) OF FRESH MILK AND UHT MILK, FROM JANUARY 2015 TO DECEMBER 2021 Jan 2015 Mar 2015 Mei 2015 Jul. 2015 Sep. 2015 Nov. 2015 Jan 2016 Mar 2016 Mei 2016 Jul. 2016 Sep. 2016 Nov. 2016 Jan 2017 January 2012 = 100 Mar 2017 Mei 2017 Jul. 2017 Sep. 2017 Nov. 2017 Jan 2018 Mar 2018 Mei 2018 Jul. 2018 Sep. 2018 Nov. 2018 Jan 2019 Mar 2019 Mei 2019 Jul. 2019 Sep. 2019 Nov. 2019 UHT MILK (RPI) FRESH MILK (RPI) Unprocessed Milk (PPI) Jan 2020 Mar 2020 Mei 2020 Jul. 2020 Sep. 2020 2015 6.32 INCREASE IN UNPROCESSED MILK PURCHASES RELATIVE TO PREVIOUS YEAR (PERCENT)25) 2016 -0.45 2017 3.02 2018 4.82 2019 0.65 24) Graph prepared by the Office of SAMPRO based on information obtained from NielsenIQ and Statistics South Africa. 25) Table prepared by the Office of SAMPRO based on information obtained from Milk SA and the figure in respect of 2021, is an estimated figure 2020 -0.16 Nov. 2020 Jan 2021 Mar 2021 Mei 2021 2021 -0.92 26 Jul. 2021 Sep. 2021 Nov. 2021 Jan 2022#20195.00 Graph 1226) THE PRODUCER PRICE INDEX (PPI) OF UNPROCESSED MILK, FROM JANUARY 2015 TO JANUARY 2022 AND THE RETAIL PRICE INDICES (RPI) OF YOGHURT, MAAS AND PRE-PACKAGED FROM JANUARY 2015 TO DECEMBER 2021 Index Index: January 2012 = 100 CHEESE, 185.00 175.00 165.00 155.00 145.00 135.00 125.00 115.00 105.00 Jan 2015 Mar 2015 Mei 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 Mei 2016 Jul. 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 Mei 2017 Jul 2017 Sep 2017 Nov 2017 Jan 2018 Mar 2018 Mei 2018 Jul 2018 Sep 2018 Nov 2018 Jan 2019 Mar 2019 Mei 2019 Jul 2019 Sep 2019 Nov 2019 -Yoghurt (RPI) -Maas (RPI) Pre-packaged cheese (RPI) Unprocessed milk (PPI) Jan 2020 Mar 2020 Mei 2020 Jul 2020 Sep 2020 Nov 2020 Jan 2021 2015 6.32 INCREASE IN UNPROCESSED MILK PURCHASES RELATIVE TO PREVIOUS YEAR (PERCENT)25) 2016 -0.45 2017 3.02 2018 4.82 2019 0.65 24) Graph prepared by the Office of SAMPRO based on information obtained from NielsenIQ and Statistics South Africa. 25) Table prepared by the Office of SAMPRO based on information obtained from Milk SA and the figure in respect of 2021, is an estimated figure 2020 -0.16 Mar 2021 Mei 2021 Jul 2021 Sep 2021 Nov 2021 Jan 2022 2021 -0.92 27#21Table 928) INCREASE IN PRODUCER PRICE INDICES OF PARTICULAR CATEGORIES OF PRODUCTS WHICH INCLUDE INPUTS OF THE DAIRY INDUSTRY, IN THE YEAR WHICH ENDED IN JANUARY 2022 GROUP OF PRODUCTS Textiles, clothing and footwear Textiles Clothing PERCENTAGE INCREASE Footwear Paper and printed products Coke, petroleum, chemical, rubber and plastic products Coal and petroleum products Petrol Diesel Other 5.0 3.5 5.5 3.9 5.3 21.5 34.1 36.9 33.8 31.5 10.0 13.6 12.1 Chemical products Rubber and plastic products Metals, machinery, equipment and computing equipment Structural and fabricated metal products General and special purpose machinery Household appliances and office machinery 14.6 9.8 11.2 Electrical machinery and communication and metering equipment 4.8 Electricity and water Electricity Water 16.1 17.7 5.2 28) Table prepared by the Office of SAMPRO based on information published by Statistics SA. 28#225. THE CHALLENGES FOR THE SOUTH AFRICAN DAIRY INDUSTRY The South African dairy industry, like many other South African industries, is confronted by the formidable challenge created by: The largely unexpected and high increases of the prices of a wide range of important inputs in the recent past; Likely further increases in South Africa of the prices of inputs, like fuel and electricity; Likely increases in the prices of inputs and possible disruptions in respect of the supply of inputs, linked to the Russian invasion of Ukraine and the comprehensive sanctions in respect of Russia, implemented by major countries as a result of the invasion; and Consumer purchasing power, weakened by especially increases of administrated and other prices, as well as poor economic conditions in South Africa (It will take time to reach the level of economic activities achieved in the pre-Covid era). 29#23Simply said: In the immediate future, higher input cost and weak demand will be the position in which the South African dairy industry will have to operate; and • It is reasonable to accept that the validity of expectations regarding international trade, based on the information available up to the third week of February 2022, was largely destroyed by the invasion of Ukraine by Russia at the end of February 2022. 30 30#24In addition, the industry should continue with its collective efforts through the organised dairy industry in respect of, for example: The promotion of the quality of dairy products (The work of Dairy Standard Agency); The maintenance and development of functional compositional, food safety and metrology standards; Transformation; Consumer Education; Foreign Trade Dispensation; Protection of the integrity of dairy products; - Protection of the environment; The promotion of animal welfare, including animal health; and Functional research. 31