Determinants of Milk Marketing Channel Selection by Urban and Peri-Urban Commercial Dairy Producers in Ethiopia

This study investigated the determinants of raw milk marketing channel choice of dairy producers using cross-sectional data collected from 475 commercial dairy farms in selected towns of Ethiopia. Descriptive statistics and a multivariate probit (MVP) model were used to analyze the data. The result showed that milk marketing channel of the surveyed farms was dominated by an informal marketing system. The results of the MVP indicated that education, farm experience, farm size, market distance, membership in local dairy cooperatives, price, and farm locations had a significant impact on the choices of milk market channel. We suggest that efforts to improve the performance of the commercial farms’ milk marketing need to be geared towards modernizing the raw milk marketing. That could include arranging formal and informal training for dairy producers, strengthening the milk processing industries in all major cities so that they can be a feasible marketing option for dairy producers; strengthening existing dairy cooperatives to facilitate milk collection; and organizing milk collection centers in cities by processing companies.