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01/05/2023 © IFCN 2015 | 1
ESADA Conference 2015
GLOBAL DAIRY PRODUCTION STATUS, TRENDS, AND OUTLOOK
Dr. Dorothee BoellingIFCN Dairy Farm Analysis
01/05/2023 © IFCN 2015 | 2
Agenda
1. The IFCN concept
2. Milk prices and their drivers
3. Outlook 2025
4. Summary
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Mission: We create a better understanding of the dairy world by providing comparable data, knowledge and inspiration.
IFCN - The Global Dairy Research Network
The network approach – consisting of three pillars - the network of researcher - the network of companies/institutions and - the IFCN center with > 15 dairy economists.
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Research partners in 100 countries
Status of the IFCN Network in 2015
Supporting partners (> 100)
Institutional partners
55 Countries where we collect farm economic data & country data 45 Countries where we collect country profile data
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IFCN – an ongoing knowledge creation system
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Agenda
1. The IFCN concept
2. Milk prices and their drivers
3. Outlook 2025
4. Summary
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World milk price & its volatility
Combined IFCN world milk price indicator: weighted average of three IFCN world milk price indicators:
1. SMP & butter (35%)
2. Cheese & whey (45%)
3. WMP (20%)
Shares are based on volumes traded on the world market.
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National milk prices driven by world price
Source: D3.4 - IFCN Monthly real time data
Germany BrazilMilk prices in ZAR/100 kg ECM Milk prices in USD/100 kg ECM
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National milk price
Combined IFCN world milk price indicator
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National milk price
Combined IFCN world milk price indicator
South Africa
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Agenda
1. The IFCN concept
2. Milk prices and their drivers
3. Outlook 2025
4. Summary
1. Dairy trade perspective
2. Dairy demand perspective
3. Dairy supply perspective
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1. The dairy trade perspective Milk surplus and deficit world-wide 2014
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
-9.6
22.1
15.8
-5.2
5.4
2.0
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1997
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2014
*20
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mill
. t m
ilk (M
E) /
year
Since 2006: Ø 2.5%; 16.8/ year
Source of data: National statistics, FAO, IMF.Calculation: Dairy consumption = milk production of all milk animals plus import minus export volumes plus or minus stock changes. Per capita consumption = dairy consumption in the country divided by population. Specification: Milk production data in ECM (Energy corrected milk) standardised to 4% fat and 3.3 % protein.ME (milk equivalent) based on fat and protein only.
2. Dairy demand perspectiveWorld milk demand growth in mill t/year
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
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Avg. world milk consumption per capita in 2014: 113 kg ME
Source of data: National statistics, FAO, IMF.Calculation: Dairy consumption = milk production of all milk animals plus import minus export volumes plus or minus stock changes.Per capita consumption = dairy consumption in the country divided by population.Specification: Milk production data in ECM (Energy corrected milk) standardised to 4% fat and 3.3 % protein.ME (milk equivalent) based on fat and protein only.
50
difference of margin over compound feed cost to boundJanuary 2015 in %
>15%>-15% <= 15%
<= -15%no data
2. Dairy demand perspectiveMilk consumption per capita in kg ME per capita
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
50
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3. Dairy supply perspectiveAverage annual regional change in milk production 2014 vs. 2009
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What is driving milk supply growth Milk/feed prices and farmers margin
Milk prices in USD/100 kg (ECM) Margin over compound feed costs in USD/100kg
farm economics:very good good poor very poor
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Margin over compound feed costs (0.3 kg/kg milk)
Bound - average 2007-2014
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World milk priceWorld feed price
-3%
-2%
-1%
Change in milk production on monthly basis
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
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% change to previous yearLong term average 2007-2014
milk production % growth:very good good poor very poor
Source: D3.4 - IFCN Monthly real time data
Milk prices in USD/100 kg (ECM)
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World milk priceWorld feed price
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Agenda
1. The IFCN concept
2. Milk prices and their drivers
3. Outlook 2025
4. Summary
IFCN has computed 10 year dairy outlooks annually since 2012.
We believe:
1. Predicting the future shall be done in a dialogue.
2. Predicting the future shall be
a continued process
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IFCN Baseline method creating country fact sheets 1996 – 2025
Supply & demand balance Milk supply, demand, Imports/export Self sufficiency
Milk demand details% growth / yearPopulationPer capita consumption
Milk supply details% growth / yearCows & milk yieldFarm number and size
© IFCN 2015 for internal use Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
01/05/2023 © IFCN 2015 | 17Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
Dairy world in 2025 – Milk demand
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Dairy World in 2025 – Milk supply
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
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14%
43%
19%38%
54%
33%
27%35%
World milk production growth until 2025Absolute and % change in milk volumes 2025 vs 2014 mill t ECM
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
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IFCN Dairy Outlook for Africa 2025
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Dairy World in 2014 and 2025IFCN Baseline– produced in 3/ 2015
Unit Annual values2014 2025
Change 2025 vs 2014 % % / year
Milk Supply & Demand* mill t ECM 819 1059 29% 2.4%
Supply DriversNumber of milk animals mill head 364 407 12% 1.0%
Average milk yield t/milk animal/year 2.2 2.5 16% 1.3%
Dairy farm number Mill 120 101 - 16% -1.6%
Average farm size head/farm 2.9 3.8 34% 2.7%
Demand DriversPopulation billion 7.2 8.2 14% 1.2%
Demand per capita Kg ME/ capita/year 113 129 14% 1.2%
World dairy trade** mill t ECM 54 99 82% 5.6%
IFCN Baseline: * Milk from all animals (cows, buffalo, goat, sheep, camel) Small deviations of total supply and demand due to changes in stocks** Excl. EU28 intra-trade - Representing volume traded from surplus countries; imports from net exporters not included
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
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Agenda
1. The IFCN concept
2. Milk prices and their drivers
3. Outlook 2025
4. Summary
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Summary
• World market price for milk are very volatile and drive national milk prices.
• Milk demand growth is strong – on average > 16.8 mill t per year. In good years we need approx. as much as the annual production of NZ.
• Milk supply growth can meet demand growth once milk prices, feed prices, weather and politics are „reasonable“.
• Dairy Outlook: In 2025 we produce and consume 240 mill t more milk. This will be three times the US milk production. 80% of this additional milk will be produced locally, 20% will be traded from milk surplus to deficit regions.
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Thank you for your attention
Dairy Research Center in Kiel, Germany
Network of researchers
Conference 2015 hosted by Gea
Network of companies
Conference 2015 hosted by Cargill and Elanco
This presentation is the result of a large number of people working together since 2000