The state-owned Dairy Development Corporation (DDC) is grappling with overstocked warehouses as powdered milk and butter worth more than Rs 1.15 billion approach their expiration date. The DDC issued a public notice on Sunday announcing to sell 600 metric tons of dairy products at revised prices urgently to reduce inventory.

According to a senior DDC official, the stockpile includes 950 metric tons of powdered milk and 770 metric tons of butter, most of which have only five to six months of shelf life remaining. These products typically have a shelf life of 18 months from the date of production.

The notice announced the sale of 300 metric tons each of powdered milk and butter at adjusted rates. “Our warehouses and even rented private storage facilities are filled to capacity. Most of the products are nearing expiry, and we’re under pressure to pay farmers. So, we’ve decided to reduce inventory by adjusting prices,” a DDC official told New Business Age .

While powdered milk can be stored at ambient temperatures, butter requires sub-zero storage. Improper storage conditions risk accelerating spoilage, said DDC spokesperson Nilkantha Gautam. He added that the delay in selling the accumulated stock has worsened the corporation’s financial burden, leaving it unable to clear dues of over Rs 1 billion owed to dairy farmers.

DDC’s own storage facilities can hold only 500 metric tons. To manage the overflow, it has rented private storage units with an additional capacity of 250 metric tons. The corporation stores dairy products at distribution centers in Balaju, Kharipati, Hetauda, Lumbini, Nepalgunj, Dhangadhi, Janakpur, and Biratnagar.

This is not the first time DDC has faced such a crisis. Last year, it failed to pay farmers on time for milk purchased on credit and had to seek a government loan of Rs 600 million to clear its dues.

With total inventory now at 1,720 metric tons—well beyond its core storage capacity—DDC has scaled back its daily milk collection. From a normal daily intake of 200,000 liters, the volume has dropped to around 90,000 liters per day.

This reduction has raised alarms among dairy farmers, who now fear the prospects of a “milk holiday,” where milk collection is temporarily suspended. The Central Dairy Cooperative Association Nepal (CDCAN) criticized DDC for failing to protect farmers’ interests. “Despite being a government agency, DDC is acting against farmers’ welfare,” said CDCAN President Thaneshwar Sapkota.

In response, spokesperson Gautam said the reduction in milk collection was unavoidable due to storage constraints. He blamed the recurring inventory issues on falling consumer demand. “Five years ago, DDC sold about 120,000 liters of milk daily. Now, that number has dropped to just 80,000 liters,” he noted.