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Report on Dairy Consumption and Production in Europe
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Dairy statisticsAn insiders guide 2014
Contents
Introduction 4
Farm inputs UK feed prices 5UK fertiliser prices 6Oil prices 7GB land prices 8Rent prices in England and Wales 9
On-farm data UK dairy farm numbers 10Producer numbers by region 11EU dairy producer numbers 12UK dairy cow numbers 15UK average herd size 16EU dairy cow numbers 17UK average milk yield 18TB incidences in cattle in Great Britain 19Profitability of dairy production systems 20
Milk supply GB and UK wholesale milk deliveries 22Milk deliveries by nation (Butterfat adjusted) 24EU-28 wholesale deliveries 25World production 27UK milk flow 29
Milk prices and contractsUK annual average farmgate price 30UK monthly average farmgate price 31UK milk producer league table 33Market indicators 35EU annual average farmgate price 37UK wholesale prices 39EU wholesale prices 40
World wholesale prices 41Fonterra auction prices 42
Dairy processing and trade UK milk utilisation 43EU dairy product production 44UK mild Cheddar margins 45UK mature Cheddar margins 47EU market management measures 49UK quota position 51UK dairy trade balance 52EU dairy balance sheet 54World dairy trade 55
Consumer UK average household consumption 57Liquid milk retail prices 59Branded vs private label liquid milk retail prices 60Liquid milk sales 61Pasteurised milk 62Organic and filtered milk sales 63Modified and UHT milk sales 64Milk purchases by container type 65Cheese market 66Cheddar market 68EU butter consumption 70EU liquid milk consumption 71EU cheese consumption 72
Useful information Conversion tables 73UK dairy industry organisations 74Internet sites for sourcing agricultural information 76About DairyCo 78
Introduction
This guide has been designed to give answers to the most frequently asked questions about the dairy industry in the UK and the world.
It provides data stretching from the farmgate to consumers and, this snapshot of the dairy industry, is increasingly used by the media and farmer groups to improve bargaining power and start informed debates.
In addition to the information provided in this guide, please find details of web addresses on page 76 which explain the areas discussed in more detail.
We would like to express our gratitude to the many individuals and organisations who have provided some of the statistics found in this publication. This support is gratefully acknowledged.
To receive free, regular market updates emailed to you every week, call the MI team on 024 7647 8685 or email [email protected] and ask for the free DairyCo Dairy Market Weekly.
Further information on these topics can be found at dairyco.org.uk/market-information
Market Intelligence Team
DairyCo
4
Farm inputs
UK feed prices
5
Global grain prices fell in 2013 on increased grain supplies, however, the smallest UK wheat harvest since 2001 meant UK wheat prices declined by a lesser extent.
The price of feed wheat fell by 6/tonne (3.1%) and the price of intensive energy dairy feed rose 23/tonne (8.8%).
Average price (/tonne)
2008 2012 2013
Feed Wheat 143 193 187
Soyameal Argentine 262 351 386
Intensive Energy Dairy Rations 206 261 284
Note: Prices are from different outlets: Feed Wheat (Delivered), Soyameal (Ex-Store), Intensive Energy Dairy Rations (On Farm).
Source: FARM BRIEF, AHDB/HGCA.
This data is protected under the various copyright acts. No reproduction in whole or in part is permitted by any means whether printed, photocopied, sound or visual broadcast without the express permission of FARM BRIEF.
UK feed prices
450
400
350
300
250
200
150
100
50
0
Intensive EnergyDairy Rations
Soyameal(Argentine)
Feed Wheat
08 09 10 11 12 13
/to
nne
Source: FARM BRIEF, AHDB/HGCA.
Farm inputs
UK fertiliser prices
Average prices for AN (Ammonium Nitrate) fell by 9.5% between 2012 and 2013 to 277/tonne, due to lower global Urea prices.
Average price (/tonne)
2008 2012 2013
20.10.10 Blended bags 379 316 293
Granular Urea (bags) 353 356 308
AN (UK - Bags) 337 306 277
Source: FARM BRIEF.
UK fertiliser prices
400
380
360
340
320
300
280
260
240
220
200
AN(UK - bags)
Granular Urea(bags)
20.10.10Blended bags
08 09 10 11 12 13
/to
nne
Note: Urea data prior to Jan 2012 is based upon Prilled Urea as Granular prices were not available.
Source: FARM BRIEF.
This data is protected under the various copyright acts. No reproduction in whole or in part is permitted by any means whether printed, photocopied, sound or visual broadcast without the express permission of FARM BRIEF.
6
Farm inputs
Oil prices
Oil prices fell in 2013 on the previous year to an average price of $105.87/barrel. However, this price was still up 276.8% on the average price a decade ago.
The average price in 2013 of 67.74/barrel was 1.9% lower than 2012.
Average oil price
2003 2012 2013
US$/barrel 28.10 109.45 105.87
/barrel 17.17 69.07 67.74
Source: OPEC. Prices have been converted from US$/barrel using average annual exchange rates.
Oil prices
7
80
70
60
50
40
30
20
1004 06 08 10 1203 05 07 09 11 13
/ba
rrel
Source: OPEC. Prices have been converted from US$/barrel using average annual exchange rates.
The average price for pasture land in England and Wales stood at 17,191/hectare in H2-2013, an increase of 661 (4.0%) from H1-2013. The average price for arable land was 21,129/hectare in H2-2013, up 883 on H1-2013 (4.4%).
The highest pasture land price in H2-2013 was 21,313/hectare in the North West, unchanged on H1-2013. The lowest price was in Scotland at 6,178/hectare, down 9.1% on H1-2013 but unchanged on H2-2012.
The highest price for arable land was 22,239/hectare, which was recorded in both the North West and South East in H2-2013. The lowest price was in Scotland at 12,355/hectare, down 18.4% on H1-2013, unchanged on H2-2012.
Land prices for dairy farms (pasture land) in England and Wales
/ac /ha
H2-2013 6,957 17,191
Source: RICS Farmland Market Survey.
Land prices England and Wales
Farm inputs
GB land prices
8
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
per hectacre per acre
08 09 10 11 12 13
Note: The above graph shows annual average prices for pasture land.
Source: AHDB/DairyCo, RICS Farmland Market Survey.
Farm inputs
Rent prices in England and Wales
Rent levels across England and Wales have been quite variable between H2-2012 and H2-2013. The average rent for pasture land in England and Wales (ATA 95) rose by 4/hectare (1.9%) from 241/hectare in H2-2012 to 245/hectare in H2-2013. There was, however, a 24/hectare (9.0%) half-yearly decrease between H1-2013 and H2-2013.
The average rent price for arable land in England and Wales (ATA 95) rose by 14/hectare (3.9%) to 387/hectare between H2-2012 and H2-2013. Land rented under AHA 86 also showed a 3.9% increase to 201/hectare.
Land rent levels for dairy farms (pasture land) in England and Wales
AHA 86 ATA 95
/ac /ha /ac /ha
H2-2013 57 141 99 245
Note: AHA 86 The Agricultural Holdings Act 1986, ATA 95 The Agricultural Tenancies Act 1995.
Source: RICS Farmland Market Survey.
Land rent levels England and Wales
9
300
250
200
150
100
50
0
/ha
ATA 95AHA 86
08 09 10 11 12 13
Note: The above graph shows annual average rental prices for pasture land.
AHA 86 The Agricultural Holdings Act 1986. ATA 95 The Agricultural Tenancies Act 1995.
Source: AHDB/DairyCo, RICS Farmland Market Survey.
On-farm data
UK dairy farm numbers
10
In June 2013, there were 13,265 dairy farms in the UK 8.8% (1,284) less than in 2012.
In the past ten years, the number of dairy farms in England and Wales has fallen by 37.7%. In Scotland, the number of dairy farms has fallen by 43.6% and in Northern Ireland by 39.6%.
June census
2003 2012 2013
England & Wales 16,977 10,724 10,581
Scotland 1,590 1,163 896
Northern Ireland 4,425 2,662* 2,684*
UK 22,992 14,549 13,265
Note: England and Wales producer number figure for 2012 is a May figure as June data was not available.
For England and Wales, all premises where milk is produced are referred to as Production Holdings; this includes holdings with sheep, goats and buffalo.
*Change in methodology in Northern Ireland in 2012 with data revised back to 2006.Figures for Scotland are for dairy type holdings where dairy farming contributes more than two-thirds of the holding standard gross margins up until 2012. As of June 2013, Scotland has changed its typology which is now based on 11 farm types and uses the cattle tracing scheme resulting in a significant fall in the number of holdings compared with 2012.
Source: DHI, DARD, SEERAD.
UK dairy farm numbers
25,000
20,000
15,000
10,000
5,000
003 04 05 06* 07* 08* 09* 10* 11* 12* 13*
Source: DHI, DARD, SEERAD.
On-farm data
Producer numbers by region
Figures are for May unless otherwise stated.
11
Note: September figures were used for 2003. Therefore figures do not tally exactly with the farm numbers table on page 10.
*Figures for Scotland are for dairy type holdings where dairy farming contributes more than two-thirds of the holding standard gross margins up until 2012. As of June 2013, Scotland has changed its typology which is now based on 11 farm types and uses the cattle tracing scheme resulting in a significant fall in the number of holdings compared with 2012.
Source: DHI, DARD, SEERAD.
Scot
land
2003 1,590
2012 1,163
2013* 896
Nor
th
2003 3,217
2012 2,141
2013 2,120
Mid
land
s 2003 4,524
2012 2,850
2013 2,780
Sout
h W
est
2003 4,772
2012 3,209
2013 3,182
Sout
h Ea
st 2003 1,144
2012 620
2013 616
Wal
es
2003 2,909
2012 1,904
2013 1,895
Scotland
North
Midlands
Wal
es
South West
SouthEast
On-farm data
EU dairy producer numbers
12
In 2012/13, there were 922,000 dairy farmers in the 27 EU member states.
The population of dairy farmers in the EU-15 fell by 20.5% (91,300 farmers) between 2007/08 and 2012/13 approximately 50 farmers per day left the industry.
EU dairy producer numbers
Thousand dairy farmers
07/08 10/11 11/12 12/13
Austria 58.0 49.9 48.8 46.5
Belgium 13.0 10.7 10.3 9.8
Denmark 5.0 4.2 4.0 3.8
Finland 14.0 11.7 10.9 10.2
France 99.0 83.8 80.3 77.2
Germany 99.0 88.7 83.9 80.8
Greece 6.0 4.3 3.9 3.7
Ireland 21.0 19.0 19.2 18.5
Italy 46.0 40.4 38.8 37.4
Luxembourg 1.0 0.8 0.8 0.8
Netherlands 21.0 19.4 18.9 18.5
Portugal 11.0 8.1 7.5 7.0
Spain 26.0 21.9 20.7 19.6
Sweden 8.0 6.1 5.8 5.4
UK 18.0 15.5 15.0 14.5
EU-15 445.1 384.3 368.6 353.8
Cyprus 0.0 0.2 0.2 0.2
Czech Republic 3.0 2.5 2.4 2.3
Estonia 1.0 1.1 1.0 0.9
13
Source: Eurostat.
Thousand dairy farmers
07/08 10/11 11/12 12/13
Hungary 6.0 5.8 4.7 4.3
Latvia 20.0 12.2 11.6 11.2
Lithuania 69.0 46.6 44.4 41.3
Malta 0.0 0.1 0.1 0.1
Poland 232.0 173.3 162.1 153.0
Slovakia 1.0 0.9 0.9 0.8
Slovenia 10.0 8.9 8.5 8.2
EU-25 789.0 635.7 604.3 576.1
Bulgaria 109.0 18.1 13.8 10.8
Romania 663.0 385.0 368.0 335.0
EU-27 1,561.1 1,038.8 986.2 922.0
Source: Eurostat.
EU-15 dairy producer numbers
120
100
80
60
40
20
0
Tho
usan
d da
iry
prod
ucer
s
2012/132007/08
UK
Swed
enSp
ain
Portu
gal
Luxe
mbou
rgIta
ly
Nethe
rland
s
Irelan
d
Gree
ce
Germ
any
Franc
e
Finlan
d
Denm
ark
Belgi
um
Austr
ia
14
Change in number of dairy producers per country between 2011/12 and 2012/13 (%)
0%-5%-10%-15%-20%-25%
MaltaCyprus
NetherlandsSlovakia
Czech RepublicUK
LatviaIreland
ItalyGermany
FranceLuxembourg
SloveniaBelgium
DenmarkAustria
SpainPolandFinlandGreece
SwedenEstonia
LithuaniaPortugalHungaryRomaniaBulgaria
Source: Eurostat.
On-farm data
UK dairy cow numbers
15
While the number of cows in the UK fell slightly, down 1.7% in 2013 on 2012, the distribution of cows saw larger losses in both England and Northern Ireland.
Thousand head
2003 2012 2013
England 1,435 1,121 1,113
Wales 268 224 223
Scotland 198 163 167
Northern Ireland 290 285 280
UK 2,191 1,812 1,782
Note: Dairy cow numbers refer to dairy female cattle aged two years or more with offspring.
England and Wales figures have been sourced through CTS (cattle tracing system), Northern Ireland data has been sourced through APHIS, Scotland use survey data. CTS/APHIS uses breed of cattle to identify purpose. Therefore, cannot be used for a direct comparison with previous years.
Source: Defra, DARD, Welsh Government, SEERAD.
UK dairy cow numbers
2,250
2,000
1,750
1,500
1,250
1,000
750
500
250
0
Tho
usan
d he
ad
NorthernIreland
England Wales Scotland UK
2003 2012 2013
Source: Defra, DARD, Welsh Government, SEERAD.
16
The percentage reduction in cow numbers was less than the reduction in herds. Therefore, average herd size continued to increase between 2012 and 2013.
June census
2003 2012 2013
England 102 127 128
Wales 91 118 118
Scotland 125 157 185
Northern Ireland 66 107 104
UK 95 125 126
Note: Averages have been worked out according to figures found in the dairy farm numbers and dairy cow numbers tables. Scotland 2013 figures affected by change in holdings methodology.
Source: Defra, DARD, DHI, SEERAD, Welsh Government.
UK average herd size in 2013
200
180
160
140
120
100
80
60
40
20
0
Cow
hea
d/he
rd
NorthernIreland
England Wales Scotland UK
Source: Defra, DARD, DHI, SEERAD, Welsh Government.
On-farm data
UK average herd size
On-farm data
EU dairy cow numbers
17
The EU-15 had 76.9% of dairy cows in the EU-28 in 2013 with the UK herd representing 7.7% of the total EU-28 dairy cow population.
Thousand head
2003 2012* 2013*
UK 2,207 1,786 1,817
EU-15 19,217 17,703 18,050
EU-25 23,923 21,555 21,832
EU-27 24,285 23,012 23,314
EU-28 n/a 23,193 23,482
UK% (EU-28) n/a 7.7% 7.7%
*Provisional.
Note: Eurostat figures for the UK are different from the UK dairy cow numbers on page 15 since figures are collated from different sources.
Croatia data unavailable for 2003.
Source: Eurostat.
18
In 2013, the UK annual average milk yield rose by 93 litres/cow. The 2013 yield of 7,535/cow/annum was 1.2% higher than in 2012 and 13.8% more than in 2003.
Litres/cow/annum
2003 6,621
2010 7,273
2011 7,528
2012 7,442
2013* 7,535
*Provisional.
Source: Defra.
UK average milk yield
8,000
7,500
7,000
6,500
Litr
es/c
ow/a
nnum
04 06 08 10 1203 05 07 09 11 13**Provisional.
Source: Defra.
On-farm data
UK average milk yield
On-farm data
TB incidences in cattle in Great Britain
19
The number of cattle being slaughtered due to TB decreased by 13.6% (5,115) between 2012 and 2013.
Number of cattle slaughtered for TB in GB
2003 23,972
2011 34,238
2012* 37,734
2013* 32,619
*Provisional.
Note: Statistics above are for all cattle slaughtered due to TB not just dairy cattle.
Source: Defra.
Number of cattle slaughtered for TB in GB
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
004 06 08 10 12*03 05 07 09 11 13*
Num
ber
of c
attle
*Provisional.
Source: Defra.
20
Milkbench+ analysis has, again, identified and analysed three enterprise types:
Cows at grass. Predominantly grass-based and operating at lower yield levels
Composite. Maximum use of family labour and a mixed approach to feeding and housing
High-output cows. Generally housed for more of the year with more intensive use of major inputs.
DairyCos Milkbench+ Evidence Report 2014 highlights the following findings:
Due to difficult weather conditions and increasing feed prices, the average net margin in 2012/13 was negative and 2.3 pence per litre (ppl) less than in 2011/12 at -0.9 (ppl)
Despite this, the top 25% of producers in all three enterprise types achieved a positive net margin, with the top 25% in Cows at grass earning the highest net margin overall
The top 25% of dairy farms achieved a slightly higher milk yield, but, importantly, used significantly fewer resources at cheaper prices, which resulted in lower production costs and a higher net margin
The difference in performance is much larger between the top 25% and bottom 25% of producers within each enterprise type, than it is across farm types
Four drivers explained a minimum of 60% of the difference in cost of production between the top and bottom 25% in each of the three enterprise types. These drivers are:
On-farm data
Profitability of dairy production systems
21
Feed cost
Labour cost
Power and machinery cost
Depreciation.
These drivers are similar to previous year results apart from the inclusion of depreciation instead of herd replacement cost.
According to the international dairy network IFCN, UK dairy farms have, on average, larger herds and slightly lower milk yields, together with lower production costs and higher profitability than the average for Western Europe.
Cows at grass Composite
High-output cows
Number of farms 120 130 72
Average herd size (cows) 168 185 266
Total non-forage feed (kg dry matter per cow per year)
1,326 2,745 2,853
Yield (litres per cow per year) 5,890 7,885 8,619
Labour (hours/cow/year) 36 37 34
Revenue (pence per litre) 31.5 31.0 31.4
Total variable costs (pence per litre) 11.4 14.7 14.8
Total fixed costs (pence per litre) 17.4 14.1 14.0
Total cost of production (pence per litre) 32.3 32.4 31.9
Net margin (pence per litre) -0.8 -1.4 -0.5
Net margin ( per hectare per year) -12 -89 -33
Note: Milkbench+ is an Internet-based benchmarking service that allows British dairy farmers to compare how their enterprise is performing against other dairy farms.
Source: AHDB/DairyCo, analysis of the Milkbench+ 2012/13 sample containing 322 dairy enterprises.
22
In 2013/14, UK milk production was 5.4% (705 million litres) higher than the previous milk year.
GB milk production rose by 5.3% in 2013/14 versus the previous milk year.
Northern Ireland milk production also increased in 2013/14 but by a slightly higher percentage of 6.1% (118 million litres).
The strength in production during 2013/14 was encouraged by favourable weather conditions throughout the year and positivity in the industry, helped by stronger farmgate milk prices.
Million litres
GB UK
03/04 12/13 13/14 03/04 12/13 13/14
Apr 1,098 1,015 932 1,271 1,204 1,112
May 1,171 1,048 1,034 1,367 1,252 1,234
Jun 1,087 997 987 1,266 1,186 1,177
Jul 1,061 944 963 1,232 1,116 1,144
Aug 1,028 910 954 1,181 1,063 1,116
Sep 969 864 919 1,101 997 1,063
Oct 989 865 941 1,116 994 1,088
Nov 954 843 920 1,071 974 1,067
Dec 1,002 894 979 1,127 1,039 1,144
Jan 998 897 1,004 1,127 1,059 1,179
Feb 926 824 931 1,054 978 1,099
Mar 1,005 934 1,061 1,152 1,112 1,257
Total 12,288 11,036 11,624 14,063 12,974 13,680
Note: Figures are subject to rounding.
Source: RPA, DARD.
Milk supply
GB and UK wholesale milk deliveries
23
UK wholesale milk deliveries
UK wholesale deliveries by milk years (April-March)
1,400
1,350
1,300
1,250
1,200
1,150
1,100
1,050
1,000
950
900
2013/142012/132003/04
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Mill
ion
litre
s
14,500
14,000
13,500
13,000
12,500
Mill
ion
litre
s
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
2012
/13
2013
/14
Source: RPA.
Source: RPA.
24
Milk supply
Milk deliveries by nation (Butterfat adjusted)
Between the 2011/12 and 2012/13 milk years, butterfat-adjusted milk deliveries fell by an average of 3.5% across all nations in the UK.
It decreased by 4.7% in England, 3.4% in Wales and 0.7% in Northern Ireland but increased marginally in Scotland.
Million litres
2010/11 2011/12 2012/13
England 8,639 8,640 8,234
Wales 1,537 1,595 1,540
Scotland 1,268 1,279 1,280
Northern Ireland 1,921 2,004 1,990
UK 13,365 13,518 13,044
Note: Figures are subject to rounding.
Source: RPA.
Butterfat-adjusted milk deliveries by nation
10,000
8,000
6,000
4,000
2,000
0
Mill
ion
litre
s
NorthernIreland
England Wales Scotland
2010/11 2011/12 2012/13
Source: RPA.
25
Milk supply
EU-28 wholesale deliveries
Milk deliveries in the EU-28 were 2.8% higher in 2013/14 than in 2012/13. Eighteen countries increased their production including Germany, France, UK, Netherlands and Poland.
The UK, which saw its milk deliveries increase 5.4% between 2012/13 and 2013/14, remains the third largest producing country in the EU.
EU-28 wholesale deliveries
Thousand tonnes
2003/04 2012/13 2013/14
Germany 27,270 29,706 30,631
France 23,122 24,189 24,677
UK 14,481 13,359 14,086
Netherlands 10,590 11,671 12,344
Poland n/a 9,817 10,092
Italy 9,963 9,791 9,721
Spain 5,958 5,948 6,008
Ireland 5,288 5,353 5,581
Denmark 4,507 4,914 5,074
Belgium 2,820 3,120 3,534
Austria 2,658 2,947 2,972
Sweden 3,226 2,850 2,890
Czech Republic 632 2,431 2,365
Finland 2,411 2,246 2,309
Portugal 1,842 1,825 1,791
Hungary 1,661 1,398 1,370
Lithuania 1,039 1,356 1,357
Romania 180 870 904
26
Thousand tonnes
2003/04 2012/13 2013/14
Slovakia 961 847 826
Latvia 438 722 755
Estonia 494 673 721
Greece 644 669 643
Slovenia 505 532 518
Bulgaria n/a 499 494
Luxembourg 258 277 290
Cyprus 149 153 159
Croatia 549 573 506
EU-15 115,038 118,863 122,551
EU-27 121,097 138,161 142,111
EU-28 n/a 138,734 142,617
Note: Figures do not include Malta, however, it is estimated they only produce around 3,000 - 6,000 tonnes per month which would not substantially affect any percentage changes.
*Croatia joined the EU on 1 July 2013, historic data was available and has been included for reference.
Source: Eurostat.
27
Milk supply
World production
World milk production continues to increase and reached 603 billion litres in 2012.
Although the EU-27 accounted for nearly a quarter (24.2%) of the total world milk supply in 2012, this is down from 29.4% a decade earlier.
The UK is currently the tenth largest milk producer in the world.
Billion litres
2002 2011 2012
World 495.8 589.9 602.5
EU-15 118.8 118.7 118.8
EU-25 140.2 139.9 140.6
EU-27 146.0 145.4 145.9
UK 14.4 13.4 13.5
EU-27% 29.4 24.7 24.2
UK% 2.9 2.3 2.2
Source: Faostat FAO.
28
World milk production
Top 10 milk-producing countries in 2012
650
600
550
500
45005 06 0702 03 04 08 09 10 11 12
Billi
on li
tres
100
80
60
40
20
0
Billi
on li
tres
USInd
iaCh
ina
Germ
any
Braz
il
Russi
an Fe
dera
tion
Franc
e
New
Zeala
ndUKTur
key
Source: Faostat FAO.
Source: Faostat FAO.
6,791
13,431
6,179
2271
45
29
Milk supply
UK milk flow
The UK milk market was approximately 13.6 billion litres in 2013. Milk for liquid consumption accounted for 6.9 billion litres.
UK milk flow 2013 (million litres) (a)
(a) Figures are provisional.
(b) Excludes any suckled milk.
(c) Includes 7 million litres of milk produced by the beef herd.
Note: Totals may not agree due to rounding.
Source: Defra.
Dairy herd production (b)
13,540
Beef herd production
7
Raw milk imports
132
Raw milk exports
473
Direct sales 116
Consumed on farm (c)
22
Delivered to dairies 12,952
Dairy wastage and stock change
-17
Total cows milk production (b)
13,547
Available for human consumption (c)
13,563
For liquid consumption (c)
6,885
Used in manufacture
6,223
Fed to stock/ waste on-farm
115
30
Average UK farmgate prices increased 12.7% compared to 2012, due to increasing wholesale prices and competition between buyers for milk. Farmgate prices reached record highs in 2013 as the UK recovered from the loss of production in 2012.
Average price pplYear-on-year price
difference ppl
2003 18.03 0.92
2004 18.47 0.44
2005 18.47 0.00
2006 17.95 -0.51
2007 20.67 2.72
2008 25.93 5.25
2009 23.73 -2.20
2010 24.67 0.94
2011 27.36 2.69
2012 28.08 0.72
2013 31.64 3.56Source: Defra (Including bonus payments).
Milk prices and contracts
UK annual average farmgate price
UK average farmgate price
35
30
25
20
15
10
5
0
-5
Year-on-year price diff.Average farmgate prices
03 04 05 06 07 08 09 10 11 12 13
ppl
Source: Defra (including bonus payments).
31
UK farmgate prices were consistently over 30ppl for 2013/14, apart from May due to seasonal reductions. Increasing wholesale prices and competition for milk between buyers drove prices to record levels over the year.
Average price ppl
2003/04 2012/13 2013/14
Apr 16.85 27.84 30.11
May 16.00 26.95 29.98
Jun 16.52 26.13 30.72
Jul 18.22 26.43 31.38
Aug 18.95 26.69 32.08
Sep 19.25 27.62 32.98
Oct 19.60 29.12 33.62
Nov 19.83 30.05 34.55
Dec 19.16 30.14 34.25
Jan 18.77 30.05 33.85
Feb 18.69 30.09 33.93
Mar 18.48 30.09 33.68
Average 18.36 28.43 32.59
Note: The annual average price given is unweighted and, therefore, not comparable with the annual Defra price.
Source: Defra (including bonus payments).
Milk prices and contracts
UK monthly average farmgate price
32
Monthly average farmgate prices
35
30
25
20
15
Ave
rage
pric
e pp
l
2003/4 2012/13 2013/14
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Source: Defra (including bonus payments).
33
Prices are based on the DairyCo Standard Litre. This is based on a 1 million litre/year producer on Every Other Day Collection with monthly variations for constituents, volume and hygiene, based on UK averages over the past three milk years.
2013/14 annual average price (ppl) by company (from our DairyCo standard litre)
Dairy Crest M&S Profile1 34.21
Dairy Crest M&S Variable1 34.12
Mller Wiseman Dairies Tesco2 33.04
United Dairy Farmers (NI) 32.96
First Milk Tesco2 32.90
Parkham Farms 32.85
Mller Wiseman Dairies Sainsburys 32.82
Dairy Crest Sainsburys Profile1 32.73
Dairy Crest Sainsburys Variable1 32.53
Arla Foods Tesco2 32.51
Arla Milk Link London Liquid 32.40
Arla Foods Sainsburys 32.40
Arla Milk Link Northern Manufacturing Seasonal 32.32
Paynes Dairies 32.25
Mller Wiseman Dairies Cooperative 32.23
Arla Milk Link Manufacturing Seasonal 32.22
Arla Milk Link Manufacturing A&B 32.01
Lactalis/Caledonian Cheese Profile 31.96
Arla Milk Link Northern Manufacturing A&B 31.89
Dairy Crest cheese Davidstow Profile 31.81
Grahams Dairies 31.73
Milk prices and contracts
UK milk producer league table
34
2013/14 annual average price (ppl) by company (from our DairyCo standard litre)
Dairy Crest cheese Davidstow Variable 31.72
Wensleydale 31.65
Barber A.J & R.G 31.58
Lactalis/Caledonian Cheese Seasonal 31.51
Mller Wiseman Dairies Milk Partnership 31.47
Pattemores Dairy Ingredients 31.47
Wyke Farms 31.44
Meadow Foods Compositional Level 31.44
Meadow Foods Compositional Seasonal 31.38
Lactalis/Caledonian Cheese 31.32
South Caernarfon Creameries 31.25
Dairy Crest Liquid Profile 31.20
Dairy Crest Liquid Variable 31.18
Glanbia Llangefni 31.08
First Milk Liquid A 30.84
First Milk Liquid B (Manufacturing pool) 30.60
Arla Milk Link Llandyrnog Direct Seasonal 30.55
First Milk Highlands & Islands Area 30.55
First Milk Compositional 30.48
Arla Milk Link Llandyrnog Direct A&B 30.35
1 Milk prices listed above will vary according to the amount of milk that is required by each retailer; additional milk will be paid for at Dairy Crests standard liquid milk contract price; the milk price above assumes that all litres produced are sold into the dedicated milk pools.
2 Farmers signed up with the Promar costings survey get an additional 0.50ppl.
Note: Prices listed above are exclusive of: Capital Retentions, Administration Charges, Farmer Group Subscriptions and VAT but are inclusive of: DairyCo Levy and Seasonality.
Only contracts live for the full duration of the 2013/14 milk year are included.
Source: AHDB/DairyCo.
35
In June 2013, AHDB/DairyCo began the process of conducting a review of the market indicators Actual Milk Price Equivalent (AMPE) and Milk for Cheese Value Equivalent (MCVE). AHDB/DairyCo decided to instigate an independent review of the method of calculation to establish how UK processor costs and yields have changed, having noted some processing costs (most notably energy) have increased in recent years. The results of this change were published in April 2014, alongside the new AMPE 2014 and MCVE 2014 indicators. The full report of the review can be found on the DairyCo website dairyco.org.uk
Strong increases in UK wholesale prices for the majority of the year allowed for AMPE 2014, MCVE 2014 and cream income to increase, on average up 37.2%, 17.5% and 32.0%, respectively, for 2013/14. Weakening markets at the start of 2014 were reflected in the market indicators as levels began to drop sharply.
Average price (ppl)
3-yr average 2012/13 2013/14
AMPE 2014 29.76 28.06 38.49
MCVE 2014 30.82 31.28 36.75
Cream income 7.84 6.96 9.19
Source: AHDB/DairyCo.
Milk prices and contracts
Market indicators
36
Market indicators
45
40
35
30
25
20
15
12
10
8
6
4
Cream incomeMCVE 2014AMPE 2014
Apr
10
Jul 1
0
Oct 1
0
Jan
11
Apr
11
Jul 1
1
Oct 1
1
Jan
12
Apr
12
Jul 1
2
Oct 1
2
Jan
13
Apr
13
Jul 1
3
Oct 1
3
Jan
14
ppl
ppl
The cream income to a liquid processor indicator measures trends in potential returns arising from the sale of surplus cream and not an absolute value. Actual returns will vary according to butterfat levels, exact prices for bulk cream and the fat content of actual milk production.
AMPE (Actual Milk Price Equivalent) and MCVE (Milk for Cheese Value Equivalent) provide a benchmark for the value returned from milk (at the factory gate) when used for a range of dairy products butter and powders for AMPE and mild Cheddar and other by-products for MCVE.
Source: AHDB/DairyCo.
37
Milk prices and contracts
EU annual average farmgate price
With commodity markets strengthening in 2013 compared with 2012, the EU-27 average price increased by 4.60ppl (16.9%) to 31.91ppl.
At 31.70ppl, UK dairy producers received 0.21ppl less than the EU-27 weighted average price.
ppl
2003 2012 2013
Austria 21.18 28.29 32.88
Belgium 19.42 25.24 32.52
Denmark 23.25 28.45 33.75
Finland 25.80 37.56 40.04
France 21.63 26.70 30.29
Germany 21.15 26.78 32.73
Greece 24.52 37.67 38.83
Ireland 19.63 27.00 33.47
Italy 25.05 30.90 33.94
Luxembourg 23.29 26.06 31.93
Netherlands 22.47 28.26 34.48
Portugal 23.43 25.57 29.32
Spain 20.43 25.82 29.99
Sweden 24.08 29.88 34.61
UK 18.13 28.12 31.70
Weighted EU-15 average 21.52 27.79 32.50
Cyprus 26.19 44.02 50.28
Czech Republic 16.97 24.86 28.56
Estonia 13.20 25.13 29.43
Hungary 19.51 24.94 28.27
38
ppl
2003 2012 2013
Latvia 9.63 23.12 26.71
Lithuania 9.92 22.20 27.67
Malta 29.41 40.72 45.79
Poland 11.30 24.03 27.74
Slovenia 20.97 25.20 28.23
Slovakia 15.34 24.65 28.58
Bulgaria n/a 25.48 29.43
Romania n/a 22.84 26.21
Weighted EU-27 average n/a 27.31 31.91
Note: Prices have been converted into ppl using annual average exchange rates.
UK prices are calculated on a different basis to the Defra farmgate price.
Croatia not included due to insufficient data.
Source: DG AGRI-C4, AHDB/DairyCo.
Average EU-15 farmgate prices in 2013 (ppl)
42
40
38
36
34
32
30
28
Finlan
d
Gree
ce
Swed
en
Nethe
rland
sIta
ly
Denm
ark
Irelan
d
Austr
ia
Germ
any
Belgi
um
Luxe
mbou
rg UKFra
nceSp
ain
Portu
gal
ppl
Source: DG AGRI-C4, AHDB/DairyCo.
39
Although domestic production recovered well in 2013, manufacturers needed to rebuild depleted stocks. With limited supplies, competition between buyers drove prices higher through the year. UK wholesale prices reached record, or near record, prices during the summer of 2013.
/tonne
Butter (Unsalted) Cream SMP*
Mild Cheddar
2003 2,044 974 1,407 1,985
2012 2,531 1,157 2,017 2,906
2013 3,375 1,588 2,667 3,252
*Skimmed Milk Powder.
Source: AHDB/DairyCo, DIN.
UK average wholesale prices
Milk prices and contracts
UK wholesale prices
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
SMP*BulkCream
MildCheddar
Butter(unsalted)
00 01 02 03 04 05 06 07 08 09 10 11 12 13
/to
nne
*Skimmed Milk Powder.
Source: AHDB/DairyCo, DIN.
40
Milk prices and contracts
EU wholesale prices
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Dutchwhey powder
German SMP(food quality)
Germanemmental
Dutchbutter
00 01 02 03 04 05 06 07 08 09 10 11 12 13
/to
nne
Source: Dutch Dairy Board/DIN.
Average prices rose significantly in 2013 compared to the previous year as stocks failed to recover from low levels of production in 2012. While global milk production recovered during the year, strong growth in demand added further upward pressure on wholesale prices.
/tonne*
Dutch butter
German SMP** (food
quality)
Dutch whey
powderGerman
emmental
2003 2,110 1,405 243
2012 2,432 1,931 745 3,223
2013 3,363 2,638 822 3,579
*Monthly prices have been converted from /tonne using average monthly exchange rates and then averaged out for the year.
**Skimmed Milk Powder.
Source: Dutch Dairy Board/DIN.
EU wholesale prices
41
Milk production was badly affected by adverse weather during 2012 in most major exporting countries. This continued through into the beginning of 2013, when production began to recover. Despite this, supplies were not able to keep up with demand, especially from China, placing further upward pressure on prices.
/tonne*
Butter SMP** WMP***Cheddar cheese
2003 1,060 1,073 1,228 1,453
2012 2,259 1,923 2,180 2,393
2013 2,689 2,612 2,870 2,654
*Monthly prices have been converted from US$/tonne using average monthly exchange rates and then averaged out for the year.
**Skimmed Milk Powder.
***Whole Milk Powder.
Source: USDA.
World average wholesale prices
Milk prices and contracts
World wholesale prices
3,500
3,000
2,500
2,000
1,500
1,000
500
WMPSMP Cheddar cheeseButter
00 01 02 03 04 05 06 07 08 09 10 11 12 13
/to
nne
Source: USDA.
42
Milk prices and contracts
Fonterra auction prices
4,500
4,000
3,500
3,000
2,500
2,000
1,500
WMPSMPAMF
Apr
10
Aug
10
Dec
10
Apr
11
Aug
11
Dec
11
Apr
12
Aug
12
Dec
12
Apr
13
Aug
13
Dec
13
ppl
Source: GlobalDairyTrade, AHDB/DairyCo.
The Fonterra auction takes place fortnightly on an online trading platform called GlobalDairyTrade.
Despite an increase in global milk production during the year, dairy commodity prices rose through most of 2013/14 as exportable supplies were not sufficient to meet demand. Prices spiked early in 2013 as concern over global milk production hit the market and buyers competed to secure supplies. For the majority of 2013, prices were maintained at high levels before supplies recovered sufficiently by the start of 2014 to reduce pressure on the market.
/tonne
2012/13 2013/14
WMP* 2,027 3,105
AMF** 2,026 3,158
SMP*** 2,032 2,873
*Whole Milk Powder.
**Anhydrous Milk Fat.
***Skimmed Milk Powder.
Weighted annual average prices which have been converted from $/tonne using average exchange rates.
Source: GlobalDairyTrade, AHDB/DairyCo.
Fonterra auction prices
43
In 2013/14, just under half (49.6%) of raw milk produced in the UK went into the production of liquid milk and 26.2% into cheese compared with 23.1% in 2003/04. The share of condensed milk and powders fell from 17.7% to 11.1% over this ten-year period.
Volume (million litres)
2003/4 2012/13 2013/14*
Total milk available 14,339 13,220 13,935
Milk used for liquid 6,761 6,756 6,914
Cheese 3,315 3,618 3,654
Condensed milk and powders 2,533 1,142 1,546
Exports 405 466 486
Yogurt 226 272 273
Cream 323 263 295
Butter 261 289 304
Other 380 343 429
Stock change and wastage 134 70 34
*Provisional.
Note: Total milk available = UK milk production + imports.
Milk utilisation includes exports.
Source: Defra.
Dairy processing and trade
UK milk utilisation
Dairy processing and trade
EU dairy product production
44
In 2013/14, liquid milk made up 57% of the EU-28 dairy product production, with cheese and fermented products making up 16% and 14% each, respectively.
Dairy product production is not to be confused with milk utilisation. It refers to how many tonnes of each end product have been produced. While milk utilisation shows how much milk has been used for the manufacture and production of each product.
Thousand tonnes 2013/14
Drinking milk 31,154
Fermented products 7,848
Cheese 8,548
Butter 1,936
SMP* 1,141
WMP** 616
Condensed milk 1,071
Cream 2,611
Note: Cheese data excludes processed cheese.
Data subject to retrospective amendment.
*Skimmed Milk Powder.
**Whole Milk Powder.
Source: Eurostat.
45
Processor gross margins on mild Cheddar increased by 0.5ppl between 2012/13 and 2013/14 and are 0.2ppl lower than in 2003/04.
Retail gross margins on mild Cheddar decreased by 4.8ppl between 2012/13 and 2013/14 and have increased by 12.4ppl in the past 10 years.
Margins (M) and prices for mild Cheddar
2003/04 2012/13 2013/14
ppl M ppl M ppl M
Farmgate price 18.3 28.4 32.6
Processor gross margin 3.3 15% 2.6 9% 3.1 9%
Processor selling price 21.7 31.1 35.7
Retail gross margin 12.5 37% 29.7 49% 24.9 41%
Retail price 34.1 60.7 60.5
Note: All figures are estimates and subject to rounding.
Source: AHDB/DairyCo Cheddar Supply Chain Margins 2014.
Dairy processing and trade
UK mild Cheddar margins
46
Prices and gross margins* for mild Cheddar** 2000 to 2014
70
60
50
40
30
20
10
0
Farmgatemilk price
Mild Cheddarprocessorgross margin*
Mild Cheddarretailergross margin*
Apr
00
Apr
01
Apr
02
Apr
03
Apr
04
Apr
05
Apr
06
Apr
07
Apr
08
Apr
09
Apr
10
Apr
11
Apr
12
Apr
13
Apr
14
penc
e pe
r lit
re
*The gross margin equals the difference between the selling price and buying price.
**Retailer private label, excludes branded products.
Data for the past 2 years has been revised based on the latest figures and may not exactly match past reports.
Source: AHDB/DairyCo Cheddar Supply Chain Margins 2014.
47
Processor gross margins on mature Cheddar decreased by 0.3ppl between 2012/13 and 2013/14, although they are 0.6ppl higher than ten years ago. Retail gross margins on mature Cheddar have decreased by 4.4ppl between 2012/13 and 2013/14 and have decreased by 4.8ppl in the past 10 years.
Margins (M) and prices for mature Cheddar
2003/04 2012/13 2013/14
ppl M ppl M ppl M
Farmgate price 18.3 28.4 32.6
Processor gross margin 4.7 21% 5.6 16% 5.3 14%
Processor selling price 23.1 34.0 37.7
Retail gross margin 31.9 58% 31.5 48% 27.1 42%
Retail price 55.0 65.6 64.8
Note: All figures are estimates and subject to rounding.
Source: AHDB/DairyCo Cheddar Supply Chain Margins 2014.
Dairy processing and trade
UK mature Cheddar margins
48
Prices and gross margins* for mature Cheddar** 2000 to 2014
80
70
60
50
40
30
20
10
0
Farmgatemilk price
Mature Cheddarprocessor margin*
Mature Cheddarretailer margin*
Apr
00
Apr
01
Apr
02
Apr
03
Apr
04
Apr
05
Apr
06
Apr
07
Apr
08
Apr
09
Apr
10
Apr
11
Apr
12
Apr
13
Apr
14
penc
e pe
r lit
re
*The gross margin equals the difference between the selling price and buying price.
**Retailer private label, excludes branded products.
Data for the past 2 years has been revised based on the latest figures and may not exactly match past reports.
Source: AHDB/DairyCo Cheddar Supply Chain Margins 2014.
49
Milk Marketing Observatory
The European Milk Market Observatory (MMO) was set up in April 2014 to strengthen the EU Commissions ability to monitor the dairy market and assist the industry in adapting to life after quota. The aim of the MMO is to provide the EU dairy sector with more transparency by means of disseminating market data and short-term analysis in a timely manner.
Private Storage Aid
The 2013 Private Storage Aid (PSA) scheme closed in August with 89,615 tonnes of butter placed into storage, 33% less than 2012 and 15% less than 2011. The PSA scheme for butter is not currently open although remains available to the EU as a market management tool.
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Tonn
es
2013 2012 2011
AprMar May Jun Jul Aug
Source: EU Commission.
Dairy processing and trade
EU market management measures
50
Common Agricultural Policy (CAP)
From 1 January 2015, the latest CAP reform will come into effect. Implementation will vary across GB based on decisions made by each of the devolved governments. For full details, please check the following websites:
For England:
gov.uk/government/collections/common-agricultural-policy-reform
For Scotland:
scotland.gov.uk/Topics/farmingrural/Agriculture/CAP
For Wales:
wales.gov.uk/topics/environmentcountryside/farmingandcountryside/cap/?lang=en
51
Dairy processing and trade
UK quota position
UK quota position (butterfat adjusted) 2012/13 (million litres)
Note: These figures are taken from information provided by the RPA which list: Quota (million litres) by region, Butterfat (BF) adjusted volumes delivered, difference between butterfat adjusted deliveries and quota in litres and % difference of butterfat adjusted volumes to quota.
Source: RPA.
Scot
land
Quota 1,332
BF Vol 1,280
Diff. -52
% Diff -3.9%
Nor
th
Quota 2,104
BF Vol 1,878
Diff. -226
% Diff -10.7%
Mid
land
s
Quota 3,071
BF Vol 2,618
Diff. -452
% Diff -14.7%
Sout
h W
est Quota 3,554
BF Vol 3,080
Diff. -474
% Diff -13.3%
Sout
h Ea
st
Quota 823
BF Vol 657
Diff. -166
% Diff -20.1%
Wal
es
Quota 1,710
BF Vol 1,540
Diff. -170
% Diff -9.9%
Scotland
North
Midlands
Wal
es
South West
SouthEast
52
Lower milk production during the 2012/13 milk year will have reduced stocks of dairy product. Imports of some products will have increased to meet domestic consumer demand, while there will have been limited availability of product for export. Milk production in the latter part of 2013 allowed for increased dairy product production, with the production volume of all products increasing on 2012, with the exception of cheese. However, exports did not necessarily reflect this as some product will have been used to build up stocks.
Production Imports Exports Domestic use
Raw milk (a) (million litres)
2003 14,583 105 399 14,290
2012 13,451 129 466 13,113
2013* 13,546 132 473 13,205
Butter (b) (000 tonnes)
2003 131 118 44 207 (c)
2012 145 104 38 211
2013* 145 105 45 205
Cheese (000 tonnes)
2003 351 316 90 577
2012 397 444 126 715
2013* 388 469 125 732
Cream (d) (000 tonnes)
2003 321 15 114 222
2012 250 31 69 212
2013* 304 22 44 282
Milk powders (e) (000 tonnes)
2003 216 45 173 65 (c)
2012 89 72 89 86 (c)
2013* 110 67 86 91
Dairy processing and trade
UK dairy trade balance
*Provisional.
53
(a) Raw milk data is aggregated from surveys run by Defra, RERAD and DARD, on the utilisation of milk by dairies.
(b) Includes butterfat and oil, dehydrated butter and ghee.
(c) Includes stock changes.
(d) Fresh, frozen and sterilised.
(e) Includes full cream powder, whole milk powder, partially skimmed milk powder and skimmed milk powder.
Note: Butter and cream includes production from the residual fat of low fat milk products.
Butter, cream and cheese production includes farmhouse manufacture.
Source: Defra, AHDB/DairyCo.
UK dairy imports and exports
500
400
300
200
100
0
Tho
usan
d to
nnes
2012 2013*2003
Butte
r imp
ort
Butte
r exp
ort
Chee
se im
port
Chee
se ex
port
Crea
m im
port
Crea
m ex
port
Milk
powd
ers im
port
Milk
powd
ers ex
port
*Provisional.
Source: Defra, AHDB/DairyCo.
54
The European Dairy Association has forecast a 34% rise in EU SMP exports in 2014. Butter exports are also forecast to increase while cheese exports are expected to decline by around 1%.
Production Imports Exports Use (a)
Liquid milk (000 tonnes)
2010 EU-27 32,703 3 173 32,533
2013 EU-28* 32,700 5 410 32,295
2014 EU-28** 32,800 5 480 32,325
Butter (000 tonnes)
2010 EU-27 2,010 40 161 1,974
2013 EU-28* 2,110 44 128 2,027
2014 EU-28** 2,180 45 140 2,045
Cheese (000 tonnes)
2010 EU-27 9,237 83 676 8,908
2013 EU-28* 9,595 76 788 9,128
2014 EU-28** 9,725 75 780 9,230
SMP*** (000 tonnes)
2010 EU-27 1,080 4 379 800
2013 EU-28* 1,190 5 410 783
2014 EU-28** 1,350 5 550 780
(a) includes use from stocks.
*Provisional.
**Forecast.
***Skimmed Milk Powder.
Note: These figures ignore trade between EU member states.
Source: EDA.
Dairy processing and trade
EU dairy balance sheet
55
Exports from North America are forecast to fall in 2014, according to the USDA, while exports from other regions are expected to increase. New Zealand Whole Milk Powder (WMP) exports are still expected to increase as Asian and African countries maintain a healthy demand for milk powders while the EUs Skimmed Milk Powder (SMP) trade is also expected to increase.
Exports by selected countries (000 tonnes)
2010 2013* 2014 (f)
Butter/Butteroil (a) 000 tonnes
N. America 60 98 75
S. America 20 22 24
EU-28 154 120 120
New Zealand 487 530 572
SMP** (b) 000 tonnes
N. America 390 571 550
S. America 20 16 15
EU-28 379 415 475
New Zealand 475 565 585
WMP*** 000 tonnes
N. America 10 12 12
S. America 142 202 224
EU-28 445 370 375
New Zealand 1,064 1,365 1,450
Dairy processing and trade
World dairy trade
56
2010 2013* 2014 (f)
Cheese (c) 000 tonnes
N. America 188 321 316
S. America 53 49 53
EU-28 676 800 825
New Zealand 425 460 490
(a) Includes AMF equivalent.
(b) Includes Non-fat Dry Milk.
(c) Excludes fresh cheese.
*Provisional.
**Skimmed Milk Powder.
***Whole Milk Powder.
(f) forecast.
Source: USDA Foreign Agricultural Service.
Exports for selected countries
2,500
2,000
1,500
1,000
500
0
Tho
usan
d to
nnes
SMP** (b)
2010 2013* 2014 (f)
WMP*** Cheese (c)Butter/Butteroil (a)
*Provisional.
**Skimmed Milk Powder.
***Whole Milk Powder.
(f) forecast.
Source: USDA Foreign Agricultural Service.
57
Consumer
UK average household consumption
The annual average consumption of liquid milk fell by 8.1% between 2002 and 2012 while yogurt and fromage frais consumption increased by 19.2%.
Average purchase (quantity/head/annum)
Unit 2002 2011 2012
Total liquid milk
Litres
85.3 78.3 78.3
Whole milk* 28.9 18.5 15.4
Semi-skimmed milk 47.8 51.1 54.7
Skimmed milk 8.6 8.7 8.2
Yogurt and fromage frais 8.5 10.4 10.1
Cream 1.0 1.2 1.3
ButterKg
1.9 2.1 2.1
Cheese 5.8 6.2 5.9
Expenditure (/head/annum)
2002 2011 2012
Total liquid milk 43.7 50.5 49.0
Whole milk* 15.0 11.5 9.3
Semi-skimmed milk 24.5 33.3 34.4
Skimmed milk 4.1 5.7 5.3
Yogurt and fromage frais 17.4 25.8 27.1
Cream 2.8 4.2 4.4
Butter 5.7 9.6 10.4
Cheese 30.1 41.8 41.9
*Includes full price whole milk and excludes school & welfare milk, includes UHT (Ultra Heat Treated).
Note: These figures only measure dairy products consumed in the home. It does not include those consumed out of the home or as an ingredient, eg cheese in a ready meal.
Source: Defra family food survey, AHDB/DairyCo.
58
60
50
40
30
20
10
0
Litr
es/h
ead/
annu
m
2011
Wholemilk*
Semi-skimmedmilk
Skimmedmilk
Yogurt andfromage frais
Cream
20122002
*Includes full price whole milk and excludes school and welfare milk, includes UHT.
Source: Defra family food survey, AHDB/DairyCo.
UK average household consumption
59
Consumer
Liquid milk retail prices
140
120
100
80
60
40
DoorstepTotal retailTotal market
Apr
12
Jun
12
Aug
12
Oct 1
2
Dec
12
Feb
13
Apr
13
Jun
13
Aug
13
Oct 1
3
Dec
13
Feb
14
Apr
14
ppl
In the year ending April 2014, the average price of liquid milk increased by 0.4% compared to the previous 52-week period. The average price for doorstep milk increased by 9.0% year-on-year.
ppl for 52-week period ending
Apr-13 Apr-14 % change
Total 61.6 61.8 0.4
Retail 59.3 59.4 0.3
Doorstep 119.3 130.0 9.0
Source: Kantar Worldpanel.
Retail prices for liquid milk
Source: Kantar Worldpanel.
60
Consumer
Branded vs private label liquid milk retail prices
For the year ending April 2014, private label accounted for 80.4% of the total GB liquid milk market in volume terms.
Branded liquid milk
52-w/e Apr-13 52-w/e Apr-14
Volume (million litres) 898.0 858.2
Expenditure ( million) 666.0 666.4
Average price (ppl) 74.0 78.0
Private label liquid milk
52-w/e Apr-13 52-w/e Apr-14
Volume (million litres) 4,110.7 4,256.2
Expenditure ( million) 2,302.8 2,373.8
Average price (ppl) 56.0 56.0
Other liquid milk*
52-w/e Apr-13 52-w/e Apr-14
Volume (million litres) 202.1 179.1
Expenditure ( million) 241.4 233.0
Average price (ppl) 119.0 130.0
Note: Branded and Private Label liquid milk is based on Kantar definition.
*The majority (99.96%) of other milk is doorstep delivered milk.
Source: Kantar Worldpanel.
61
Consumer
Liquid milk sales
5,400
5,300
5,200
5,100
5,000
4,900
May
10
Aug
10
Nov
10
Feb
11
May
11
Aug
11
Nov
11
Feb
12
May
12
Aug
12
Nov
12
Feb
13
May
13
Aug
13
Nov
13
Feb
14
Mill
ion
litre
s
Source: Kantar Worldpanel.
The total liquid milk market in GB grew to almost 5.3 billion litres in the year ending April 2014.
Doorstep market share has fallen to 3.4% for the year ending April 2014.
52-week period ending
Apr-13 Apr-14 % Change
Liquid milk volume sales
Volume (million litres) 5,210.7 5,293.5 1.6%
Expenditure ( million) 3,210.2 3,273.1 2.0%
% market share (volume)
Retail 96.1% 96.6%
Doorstep 3.9% 3.4%
Source: Kantar Worldpanel.
Liquid milk market volume
62
Consumer
Pasteurised milk
Semi-skimmed milk purchases represent almost 62% of the total GB pasteurised milk market in volume terms for the year ending April 2014.
Pasteurised milk volume sales
52-week period ending
Apr-13 Apr-14
Whole milk 22.6% 22.2%
Semi-skimmed 61.7% 61.8%
Low % fat milk 5.4% 5.5%
Skimmed 10.3% 10.5%
Total (million litres) 4,448.7 4,584.7
Note: % will not add up to 100% as pasteurised includes other types.
Source: Kantar Worldpanel.
63
Consumer
Organic and filtered milk sales
The volume of organic milk sales increased by 4.7% between April 2013 and April 2014. Over this period, the average price increased by 3.1% to 86.2ppl.
Organic milk has a 2.7% volume share of the total GB retail liquid milk market.
Organic milk sales
52-week period ending
Apr-13 Apr-14 % Change
Volume (million litres) 134.5 140.8 4.7%
Expenditure ( million) 112.4 121.4 7.9%
Average price (ppl) 83.6 86.2 3.1%
Source: Kantar Worldpanel.
Filtered milk sales
The filtered milk market saw volumes fall by 11.0% between April 2013 and April 2014.
In volume terms, filtered milk accounts for 5.5% of the total GB retail liquid milk market.
52-week period ending
Apr-13 Apr-14 % Change
Volume (million litres) 326.2 290.2 -11.0%
Expenditure ( million) 252.2 236.9 -6.1%
Average price (ppl) 77.3 81.6 5.6%
Source: Kantar Worldpanel.
64
Consumer
Modified and UHT milk sales
Modified milk currently accounts for 0.1% of the total GB liquid milk market in terms of volume.
Modified milk is classified as milk with additives to provide further nutritional benefits.
Modified milk sales
52-week period ending
Apr-13 Apr-14 % Change
Volume (million litres) 4.1 3.9 -4.3%
Expenditure ( million) 5.4 5.3 -1.6%
Average price (ppl) 130.8 134.5 2.8%
Source: Kantar Worldpanel.
UHT milk sales
Volume sales of UHT milk fell by 7.9% between April 2013 and April 2014 to 280.5 million litres. UHT milk sales represented 5.3% of the total GB liquid milk market in volume terms.
The average price of UHT milk increased by 5.5% to 66.9ppl in April 2014.
52-week period ending
Apr-13 Apr-14 % Change
Volume (million litres) 304.4 280.5 -7.9%
Expenditure ( million) 193.2 187.7 -2.8%
Average price (ppl) 63.5 66.9 5.5%
Source: Kantar Worldpanel.
Other6 pint
4 pint2 pint
2 litre
1 pint
1 litre
65
Consumer
Milk purchases by container type
Nearly half of milk purchased by consumers in GB was in a 4-pint container in the year ending April 2014.
Container size Milk volume (million litres) % share
1 litre 453.1 8.6%
1 pint 303.7 5.7%
2 litre 820.0 15.5%
2 pint 517.5 9.8%
4 pint 2,641.6 49.9%
6 pint 451.0 8.5%
Other 110.2 2.1%
Total 5,297.1 100.0%
Note: Data for the 52 weeks ending April 2014.
Source: Kantar Worldpanel.
Milk purchases (%) by container size for the year ending April 2014
Source: Kantar Worldpanel, AHDB/DairyCo.
66
Consumer
Cheese market
GB volume sales in the cheese market increased by 0.3% between 2013 and 2014.
The average cheese price rose by 2.8% between 2013 and 2014.
Cheese sales
52-week period ending
May-12 May-13 May-14
Volume (tonnes) 408,703 415,834 417,263
Expenditure (million) 2,626 2,703 2,788
Average price (/kg) 6.43 6.50 6.68
Source: Kantar Worldpanel.
Volume sales by cheese type (tonnes)
52-week period ending
May-12 May-13 May-14
Total Cheddar 225,739 228,273 227,058
Hard continental 16,986 18,893 18,848
Soft continental 25,962 26,977 30,438
Territorials ex. blue 32,664 32,329 30,002
Processed 40,609 40,182 39,096
Source: Kantar Worldpanel.
67
420
400
380
360
340
Thou
sand
tonn
es
20132010 2011 2012 2014
250
200
150
100
50
0
Thou
sand
tonn
es
2013
TotalCheddar
Hardcontinental
Softcontinental
Territorialsex. blue
Processed
20142012
Note: Data for the 52 weeks ending May.
Source: Kantar Worldpanel.
Volume sales by cheese type
Note: Data for the 52 weeks ending May.
Source: Kantar Worldpanel.
Average cheese price (/kg)
52-week period ending
May-12 May-13 May-14
Cheddar 6.37 6.44 6.58
Hard continental 9.18 8.86 9.42
Soft continental 6.38 6.29 6.55
Territorials ex.Blue 6.79 6.70 6.95
Processed 6.51 6.66 6.87
Source: Kantar Worldpanel.
Cheese volumes sales
68
Consumer
Cheddar market
Volume sales of Cheddar in GB fell by 0.5% from 2013 to 2014.
The average price of Cheddar (all types) increased by 2.2% to 6.58/kg between 2013 and 2014.
Volume sales by cheese type (tonnes)
52-week period ending
May-12 May-13 May-14
Mild 39,014 35,826 36,694
Medium 16,244 16,739 7,167
Mature 109,043 106,457 111,833
Extra mature 39,981 44,390 40,900
Vintage 5,015 5,642 4,916
Farmhouse 5,379 4,781 3,665
Other and full flavour 11,062 14,438 11,882
Total Cheddar 225,739 228,273 227,058
Source: Kantar Worldpanel.
69
Note: Data for the 52 weeks ending May.
Source: Kantar Worldpanel, AHDB/DairyCo.
Average price (/kg)
52-week period ending
May-12 May-13 May-14
Mild 5.64 5.76 5.81
Medium 6.47 6.37 6.46
Mature 6.41 6.47 6.58
Extra mature 6.70 6.83 7.06
Vintage 7.52 7.73 8.49
Farmhouse 6.64 7.01 7.85
Other and full flavour 6.65 6.10 6.35
Total Cheddar 6.37 6.44 6.58
Source: Kantar Worldpanel.
120
100
80
60
40
20
0
Thou
sand
tonn
es
2013
Mild
Mediu
m
Matur
e
Extra
matu
re
Vintag
e
Farm
hous
e
Othe
r and
full fl
avou
r
20142012
Cheddar volume sales
70
Consumer
EU butter consumption
UK butter consumption, at 3.4kg/capita/annum in 2012, was less than half that consumed in France.
Kg/capita/annum
2008 2011 2012
EU-27 3.6 3.6 3.7
Denmark 1.8 1.8 1.8
Germany 6.2 6.1 6.2
France 7.5 7.6 7.4
Ireland 2.4 2.4 2.4
Italy 2.4 2.3 2.3
Netherlands 3.3 3.3 3.3
Poland 4.3 4.2 4.1
Spain 0.5 0.5 0.6
UK 2.8 3.1 3.4
Sweden 1.5 1.7 1.8
Note: Figures may include butter produced from other animals.
Source: Dutch Dairy Board.
71
Consumer
EU liquid milk consumption
The UK is one of the highest consuming countries of liquid milk in the EU-27, with approximately 103 litres consumed/capita/annum in 2012.
Litres/capita/annum
2008 2011 2012
EU-27 63.0 62.4 62.2
Denmark 87.8 85.9 87.4
Germany 53.4 53.1 53.4
France 57.3 52.8 52.7
Ireland 139.0 135.9 135.9
Italy 52.6 54.3 52.8
Netherlands 50.5 47.6 47.6
Poland 42.7 41.2 41.0
Spain 81.7 81.7 80.8
UK 100.6 104.3 103.1
Sweden 100.4 89.2 89.4
Note: Figures may include milk from other animals.
Source: Dutch Dairy Board.
72
Consumer
EU cheese consumption
Cheese consumption in the UK was around 11kg/capita/annum in 2012 approximately 6kg less than the EU-27 average.
Kg/capita/annum
2008 2011 2012
EU-27 16.8 17.3 17.2
Denmark 16.4 16.6 16.4
Germany 22.2 24.2 24.3
France 26.9 26.3 26.2
Ireland 6.0 6.7 6.7
Italy 20.6 21.8 20.9
Netherlands 19.3 19.4 19.4
Poland 10.7 11.4 11.4
Spain 7.6 9.5 9.3
UK 11.8 11.0 11.2
Sweden 18.4 19.0 19.7
Note: Figures may include cheese from other animals.
Source: Dutch Dairy Board.
73
Useful information
Conversion tables
Converting volumes/weights
1 litre = 35.1950 fluid ounces
= 1.75975 pints
= 0.21997 gallons
1 pint = 20 fluid ounces
= 0.56825 litres
1 kg = 35.2740 ounces
= 2.20462 pounds
1 tonne = 1,000 kg
= 2,204.62 pounds
= 0.98421 long ton
Converting volumes/weights of milk
1 litre of whole milk = 1.02969 kg
1 kg of whole milk = 0.97116 litres
Note: Due to rounding, there may be instances where individual figures differ slightly from the total given.
74
Useful information
UK dairy industry organisations
DairyCo
Agriculture and Horticulture Development Board Stoneleigh Park Kenilworth Warwickshire CV8 2TL
T: 024 7669 2051 email: [email protected] web: dairyco.org.uk
Dairy UK
93 Baker Street London W1U 6QQ
T: 020 7486 7244 F: 020 7487 4734 email: [email protected] web: dairyuk.org
The Dairy Council
93 Baker Street London W1U 6QQ
T: 020 7467 2629 F: 020 7935 3920 email: [email protected] web: milk.co.uk
75
Dairy Council for Northern Ireland
Shaftesbury House Edgewater Business Park Edgewater Road Belfast BT3 9JQ
T: 02890 770 113 F: 02890 781 224 email: [email protected] web: dairycouncil.co.uk
National Farmers Union
Agriculture House Stoneleigh Park Stoneleigh Warwickshire CV8 2TZ
T: 024 7685 8500 F: 024 7685 8501 web: nfuonline.com
Royal Association of British Dairy Farmers
Dairy House Unit 31 Abbey Park Stareton Kenilworth Warwickshire CV8 2LY
T: 0845 458 2711 F: 0845 458 2755 email: [email protected] web: rabdf.co.uk
76
Useful information
Internet sites for sourcing agricultural information
British Cheese Boardbritishcheese.com
Canadian Dairy Information Centredairyinfo.gc.ca
Dairy Australiadairyaustralia.com.au
DairyCodairyco.org.uk dairyco.org.uk/market-information/
Department for Environment, Food and Rural Affairs (Defra)gov.uk/defra
Department of Agriculture and Rural Development (DARD)dardni.gov.uk
Dutch Dairy Boardprodzuivel.nl
European Commission Agricultural Directorateec.europa.eu/dgs/agriculture/index_en.htm
Eurostat (Statistical Office of the European Union)epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Fonterra Co-operative Group(incorporating New Zealand Dairy Board) fonterra.com
Fonterra GlobalDairyTradeglobaldairytrade.info/
Food and Agricultural Organisation (FAO)fao.org
FAOSTAT Databasefaostat.fao.org
Ian Potter Associatesipaquotas.com
77
International Dairy Federation (IDF)fil-idf.org
National Farmers Unionnfuonline.com
Organisation for Economic Co-operation and Development (OECD)oecd.org
Organisation of Petroleum Exporting Countries (OPEC)opec.org
Royal Institution of Chartered Surveyorsrics.org/
Rural Payments Agency (RPA)rpa.gov.uk
Scottish Government Statisticsscotland.gov.uk/Topics/Statistics/Browse/Agriculture-Fisheries
Statistics Canadastatcan.gc.ca
UK National Statisticsstatistics.gov.uk/hub
United Dairy Farmers (UDF)utdni.co.uk
United States Department of Agriculture (USDA)usda.gov/wps/portal/usdahome
University of Wisconsin Dairy Marketing and Risk Management Programfuture.aae.wisc.edu
Welsh Governmentwales.gov.uk/topics/statistics/?lang=en
World Trade Organisationwto.org
78
Useful information
About DairyCo
DairyCo is a levy-funded, not-for-profit organisation working on behalf of Britains dairy farmers. Our remit is to solve market failure in the dairy industry to tackle issues not currently being dealt with sufficiently to meet the needs of the industry.
Our four main strategies:
The provision of a world-class information service
Helping dairy farmers meet and manage environment needs and regulatory requirements
Helping dairy farmers increase their profitability through better business management
Promoting the positive perception of dairy farming with the general public
DairyCo is a division of the Agriculture and Horticulture Development Board (AHDB).
DairyCo is funded entirely by milk producers, via a statutory levy on all milk sold off-farm, at the rate of 0.06p per litre. This provides an annual income of around 6.9m.
79
The Agriculture and Horticulture Development Board (AHDB) operating through its DairyCo division, seeks to ensure that the information contained within this document is accurate at the time of printing. No warranty is given in respect thereof and, to the maximum extent permitted by law, the Agriculture and Horticulture Development Board accepts no liability for loss, damage or injury howsoever caused (including that caused by negligence) or suffered directly or indirectly in relation to information and opinions contained in or omitted from this document
Agriculture and Horticulture Development Board 2014. All rights reserved. No part of this publication may be reproduced in any material form (including by photocopy or storage in any medium by electronic means) or any copy or adaptation stored, published or distributed (by physical, electronic or other means) without the prior permission in writing of the Agriculture and Horticulture Development Board, other than by reproduction in an unmodified form for the sole purpose of use as information resource when the Agriculture and Horticulture Development Board (Or DairyCo) is clearly acknowledged as the source, or in accordance with the provisions of the Copyright, Designs and Patents Act 1988. All rights reserved.
AHDB (logo) is a registered trademark of the Agriculture and Horticulture Development Board.
Agriculture and Horticulture Development Board Stoneleigh Park Kenilworth Warwickshire CV8 2TL
T: 024 7669 2051 E: [email protected]
dairyco.org.uk
Additional copies of this publication can be ordered from:
dairyco.org.uk or 024 7669 2051 (ask for DairyCo publications)
It can also be downloaded from dairyco.org.uk
Sign up to receive regular dairy market updates by email at dairyco.org.uk/sign-up