Portuguese Dairy Sector Fernando Cardoso (Fenalac) Pedro Pimentel (ANIL)

Portuguese Dairy Sector - Milk Production -

Milk Production - Major Figures Milk Quota (deliveries) 2007/08 – 2.0001.000 tons (99.5%) Milk Quota (direct sales) 2007/08 – 9.000 tons (0.5%) 11.403 Dairy farmers 305.000 Dairy cows Average production/animal/year – 6180 Kg Milk production value – 750 M euros (31% of Agriculture Value and 13% of animal production) Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

Milk Quota (deliveries) 2007/08 – 2.0001.000 tons (99.5%)

Milk Quota (direct sales) 2007/08 – 9.000 tons (0.5%)

11.403 Dairy farmers

305.000 Dairy cows

Average production/animal/year – 6180 Kg

Milk production value – 750 M euros (31% of Agriculture Value and 13% of animal production)

Major figures - FENALAC 4 mainland Cooperatives – Agros, Proleite, Lacticoop and Serraleite Business volume - 300 M euros In 1996, Agros, Proleite and Lacticoop merged their processing and marketing operations into “Lactogal” 5.000 dairy farmers (45% of total) 900.000 tons of milk collected (75% mainland production/ 50% national production) 90 local cooperatives provide technical assistance and guidance Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

4 mainland Cooperatives – Agros, Proleite, Lacticoop and Serraleite

Business volume - 300 M euros

In 1996, Agros, Proleite and Lacticoop merged their processing and marketing operations into “Lactogal”

5.000 dairy farmers (45% of total)

900.000 tons of milk collected (75% mainland production/ 50% national production)

90 local cooperatives provide technical assistance and guidance

Portuguese milk production recent evolution Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Source: IFAP

Dairy Farmers Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Source: Eurostat/IFAP

Farm dimension- recent evolution (average milk production/farm) Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Source: CE/IFAP

Quota distribution (2004) Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Dairy value/total agriculture value Source: GPPAA MBS 2002 Source: INGA

One Country, several production systems Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 50% 174 tons/farm 11% 134 tons/farm 7% 687 tons/farm 27% 766 tons/farm

Milk price Evolution (EU/FENALAC*) Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Source: LTO/FENALAC *FENALAC prices don’t include Azores

Milk price Evolution (EU/AZORES) Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Source: LTO/FENALAC *FENALAC prices don’t include Azores

Main problems/threats Future of milk quotas (effects on production/prices/industry supply) Investment support under national rural development scheme National rules for dairy farms authorization and functioning Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

Future of milk quotas (effects on production/prices/industry supply)

Investment support under national rural development scheme

National rules for dairy farms authorization and functioning

PORTUGUESE DAIRY SECTOR - DAIRY INDUSTRY -

PORTUGUESE DAIRY SECTOR 2005 Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Source: INE, Estatísticas Agrícolas (em 10 3 €) Nr. Companies 387 Nr. Workers 7.240 Direct Costs 1.253.700 Turn Over 1.583.900 Add VAlue 271.700

A few comments Total TURN OVER for dairy sector in 2007: 2,1 billion euro (estimated) Only 78 of the total 387 companies have more than 9 workers These 78 companies gave jobs to more than 6.700 workers These 78 companies represents more than 90% of the estimated Turn Over for 2007 Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

Total TURN OVER for dairy sector in 2007: 2,1 billion euro (estimated)

Only 78 of the total 387 companies have more than 9 workers

These 78 companies gave jobs to more than 6.700 workers

These 78 companies represents more than 90% of the estimated Turn Over for 2007

DAIRY SECTOR IN PORTUGUESE INDUSTRY Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

DAIRY SECTOR IN PORTUGUESE INDUSTRY Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Dairy represents 13% of total turn over of portuguese Food sector being the 2nd larger just above meat and meat products sector (which includes cows, pigs, poultry and eggs) Dairy represents no more than 4% of total of companies in the Food Sector, and 7,5% of Food sector number of workers. Food sector is still number 1 on portuguese industry, with 15,9 % of turn over, 11,2% of workers and 10,5% of companies.

Dairy represents 13% of total turn over of portuguese Food sector being the 2nd larger just above meat and meat products sector (which includes cows, pigs, poultry and eggs)

Dairy represents no more than 4% of total of companies in the Food Sector, and 7,5% of Food sector number of workers.

Food sector is still number 1 on portuguese industry, with 15,9 % of turn over, 11,2% of workers and 10,5% of companies.

MASS BALANCE Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

SELLS DISTRIBUTION Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 1994  Volume  2004 1994  Value  2004

ONE COUNTRY, TWO DAIRY REGIONS Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

PER CAPITA CONSUMPTIONS Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

CONCENTRATION ON DAIRY SECTOR Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

The MAJOR 6 Major 3 dairy companies operating in Portugal LACTOGAL DANONE Fromageries BEL The 4th to 6th companies LONGA VIDA PARMALAT LACTAÇORES Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

Major 3 dairy companies operating in Portugal

LACTOGAL DANONE Fromageries BEL

The 4th to 6th companies

LONGA VIDA PARMALAT LACTAÇORES

The MAJOR 3 in each MARKET BRANCH Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 Liquid Milk Butter Cheese Fermented Milks

IMPORTS AND EXPORTS Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 In VOLUME In VALUE LIQUID MILK

IMPORTS AND EXPORTS (2006) Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009

EVOLUTION MDD MARKET SHARE Dia de Campo PORTUGUESE DAIRY SECTOR 08/06/2009 For several products in dairy sector, market share for MDD are continuously increasing and for products like standard UHT milk, flavoured milks, basic iogurts or butter, market share are above 30-35%