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Current Dairy Situation in Russia
September 22, 2015, WDS, Vilnius
100 years of Dairy Business in Russia What has happened? Just to understand
Central RussiaSiberiaCaucasusVisla ProvincesMiddle AsiaFinland
Population of Russia in 1913 -174 m people
90,1 m people in the current borders
Population forecasts
Dmitriy Mendeleev
Russia
USA
1950 2000
282 m
180 m
182 m
179 m
594 m 145 m
0
75
150
225
300
1897 год 1913 год 1920 год 1939 год 1946 год 1959 год 1989 год 1991 год 1992 год 1998 год 2000 год 2009 год 2014 год
128,6
174,1
137,7
168,5 170,5
208,8
286,7 293,0
148,5 147,8 145,2 141,9 146,3
Russian Impire/USSR/Russian Federation
Growth of population, agriculture and industry.
Victims of hunger and
Stalinism up 11 m. people
100 years of Russian History in population
Growth of population, agriculture and industry
Revolution, Civil war,
immigration, lost of
territories - lost 14-16 m. people
Soviet Union lost around 30 m people during the War and 1,5 m during the
hunger after the war
The last year of the Soviet Union
Botton of demography
100 years of Russian History in population
1910 - 1913 год 2015 год
-16% +130% +25% +146% +43% +64% +75% +50% +185%
100 years of Russian History in population
Rural populationUrban population
Butter market in 1913 - 330000 tones
Export of Russian Butter by country, 1913
UK Germany DanmarkFinland Netherlands ChinaAustria-Hungary Turkey Others
1916
yea
r
1933
yea
r
1953
yea
r
1956
yea
r
1970
yea
r
1975
yea
r
1980
yea
r
1985
yea
r
1986
yea
r
1987
yea
r
1990
yea
r
1991
yea
r
1992
yea
r
1993
yea
r
1994
yea
r
1995
yea
r
1996
yea
r
1997
yea
r
2006
yea
r
2007
yea
r
2008
yea
r
2009
yea
r
2010
yea
r
2011
yea
r
2013
yea
r
2014
yea
r
17 808
13 68513 201
14 671
20 595
17 660
22 17221 577 21 319 21 004
15 32214 829
13 86713 060
11 70710 731
9 3918 299
4 554 4 504 4 399 4 401 4 431 4 577 4 550 4 48515 years of I WW, CW,
Collectivization
Number of cows, 1916 - 2014, heads*1000Collectivization, IIWW, hunger,
recovering
excluding householders
Crisis 1998 and 10 years of
chaos.
Government starts to support
1913
yea
r
1927
yea
r
1928
yea
r
1929
yea
r
1940
yea
r
1953
yea
r
1954
yea
r
1955
yea
r
1956
yea
r
1957
yea
r
1970
yea
r
1975
yea
r
1980
yea
r
1985
yea
r
1986
yea
r
1987
yea
r
1990
yea
r
1991
yea
r
1992
yea
r
1993
yea
r
1994
yea
r
1995
yea
r
1996
yea
r
1997
yea
r
2006
yea
r
2007
yea
r
2008
yea
r
2009
yea
r
2010
yea
r
2011
yea
r
2013
yea
r
2014
yea
r
19,1
23,4 23,8 24,5
17,5
19,720,7
23,4
26,7
30,2
46,748,2
46,8
50,252,2 52,9
42,5
38,4
32,430,4
25,9
23,0
19,518,0
15,3 15,4 15,6 15,9 15,8 15,9 15,9 16,3
Cow milk production, 1913 - 2014, MTInertia of Romanov Reforms
Collectivization
WWII, hunger
excluding householders
The last year of USSR
Government starts to support
Current situation Milk Production
Milk production last 14 years
0
225
450
675
900
2000 год 2014 год
32,3 30,6
584
815
World trendRussian trend
+40%
-5%
Private farmers (registered & pying taxes)
Agri companies & «Kolkhozes»
Householders (for private consumption)
Sources: Rosstat, The DairyNews
How much milk is produced in Russia?
Sources: Rosstat, The DairyNews
16,3 m tons
Private farmers (registered & pying taxes)
Agri companies & «Kolkhozes»
Householders (for private consumption)
How much milk is produced in Russia?
According to the Low «Householders produce agri foods only for self consumption»
Sources: Rosstat, IDF, The DairyNews
Who are those householders?
Housholders’ milk production per capita in rural area, kg
Sources: Rosstat, IDF, The DairyNews
Who are those householders?
1238
431 412
4484
922
738
Who are those householders?
289
243
701
Who are those householders?
697
Who are those householders?
111
Who are those householders?
697
Actually householders moving to another segment - private farmers.
Reasons: Taxation. Government is tighten requirements collecting taxes Government Support. Government is supporting private farmers, giving subsidies and grants.
Sources: Rosstat, IDF, The DairyNews
Who are those householders?
Householders are distortion
Sources: Rosstat, IDF, The DairyNews
Who are those householders?
Real Situation2013 2014
Amount of Dairy Cows 4,550 m 4,480 m
Number inhabitants per 1 cow 31,4 32,6
Raw Milk Production 15,9 MT 16,3 MT
Milk Production per Capita per year 111 kg 111,4 kg
Milk Production per Capita per day 304 g 305 g
161 kg. per capita (IDF) 249 kg. per capita (oficial data)
340 kg. per capita (medicine norm)
Milk Consumption
Milk Consumption
2012 - 173 kg. per capita 2013 - 161 kg. per capita
Источник: Росстат, The DairyNews
Moscow Region - 2,5 MT
SPB - 0,6 MT
South - 1,6 MT
Middle and South Volga- 1,1 MT
Urals - 1,3 MT
Current situation Milk Processing
Cheese Production
Cheese production, per cap.
Liquid Milk Production, per cap.
Butter Production per cap.
2012 год 2013 год 2014 год
1 185 099
1 412 004
1 654 976
623 546,46 628 217,22 584 189,91
548 672 531 523 562 113
401 600 431 739 469 168
Falsification
Sources: Rosstat, Agri Department of reg., The DairyNews
Row milk productionMilk processingMilk Consumption
Dairy products production 1 185 KT
A region in the Central Russia
Structure
The Structure of Russian Dairy Market
Its easier to fish in a muddy water
Request: Could you please name all you Dairies in Russia, Ukraine and CIS? Could you please tell us the assortment of dairy products on each plant?
Answer: We have 19 dairies in 17 regions. Other information is a commercial secret.
The DairyNews’ communications with PepsiCo and Danone
WHY?!
Request: Could you please tell us volume of milk, processed in you plants located in the Ural Region?
Answer: This information is a commercial secret.
Company doesn’t ask Mr. Dvorcovich to increase SMP, WMP and butter production. They just ask to increase import.
WHY?!Because domestic production of WMP, SMP and butter strengthens competition for raw milk.
Letter by PepsiCo to Vice Premier Minister Arcadiy Dvorcovich, Feb. 2014
PepsCo notices your attention to the problem of limited offer strategic raw for Russian dairy market: SMP, WMP and butter.
According to this PepsiCo kindly asks you to provide alternative shipments of SMP, WMP and butter from Netherlands and US in volumes which are able to balance monopolistic position of Belarus
Companies’ share in the raw milk market
80 %
10 %
10 %
PepsiCo Danone Others
Dairy Processors (∽10 MT)Processing volumes, MT
# of plants
PepsiCo ∽1,6 ∽18
Danone ∽1,6 16
Molvest ∽1,3 8
Molochnoye Sodruzhestvo
∽1,3 5
Galaktika ∽0,7 4
Neral ∽0,7 2
Prosto Moloko ∽0,6 9
Dominant ∽0,6 4
Renna ∽0,6 2
Kipirino ∽0,5 7
Komos Group ∽0,3 4
Ban
Import
Liquid milk 277 550 458 $Yogurt 39 304 451 $Fermented products 80 931 186 $Ice-cream 39 351 582 $Total 437 137 676 $
SMP 478 480 038 $WMP 168 857 320 $infant formula 2 455 925 $Condensed milk 36 485 095 $cream paste 74 123 654 $Total Concentrated milk products 760 402 031 $
Import
Fresh cheese and curd 272 913 836 $Grated cheese 10 258 858 $Processed cheese 47 657 727 $Mould cheese 21 805 379 $Other cheeses 1 187 948 474 $Cheeses total 1 540 584 273 $Whey 96 539 686 $MPC (<85%) 6 335 160 $MPC (>85%) 25 611 940 $Casein 36 494 186 $Albumin 5 233 292 $Lactose 19 504 671 $Total Whey 189 718 934 $Sheese and whey 1 730 303 207 $
Import
Butter 618 420 179 $Butter paste 57 862 869 $Other milk fats 71 558 820 $Margerine/sperads 142 801 227 $Butter and butter fats 890 643 095 $Palm fat 643 499 610 $Coconut fats 138 877 635 $Other fats total 782 377 245 $All Fats 1 673 020 340 $
Import
Total Improt 4,6 bln $The volume of local raw milk market 4,4 bln $
What Russia loses (or finds) with bans?
What Russia loses (or finds) with bans?
What Russia loses (or finds) with bans?
ProblemsFats and protein substitution. Some where until 85% of products are falcificated. This constricts volume of dairy market. Consumer doesn’t believe to producer and doesn't have a lot of money to buy. Consumption is decreasing. Big processors don’t feel good: low consumption opposite high costs
ButSelf-cleaning of the market. Inefficient are going out.
Farmers finally understood their strength: everything in that market depends on them. Many of them are investing to the processing. New facilities are appearing.
Big opportunity for small business. A number of peopler are going to become farmers.
Government supports launches in agri business: grants and subsidies.
Generally business and society support Embargo
On my opinion, ban will not be cancelled at least util 2018
But… … you can sell in Russia…
Join us and invest in Russia
They are already in Russia
Stefan Dürr John Kopiski
Gianni Sfoggia
Justas Walker
and others…
