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Dairy livestock market analysis in bulgaria
 

Dairy livestock market analysis in bulgaria

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    Dairy livestock market analysis in bulgaria Dairy livestock market analysis in bulgaria Presentation Transcript

    • DAIRY LIVESTOCK MARKET ANALYSIS 
    • INDUSTRY OVERVIEW  Bulgarian agriculture still has lots of unsettled issues, uncertain prospects for its survival, serious difficulties for the farmers in general and a negative trend in all aspects of the breeding industry. 1. Industry Overview Milk Production in Bulgaria (tons) in figures: Year Cow Buffalo Sheep Goat Total 2005 1 286 909 6 989 105 057 109 114 1 508 069 2006 1 298 709 7 132 107 535 102 297 1 515 673 2007 1 148 328 7 052 84 907 87 174 1 327 461 2008 1 143 190 7 173 88 243 77 465 1 316 071 2009 1 073 401 7 022 87 247 64 090 1 231 760 2009/2008 -6.1% -2.1% -1.1% -17.3% -6.4%
    • INDUSTRY OVERVIEW  Milk Production in Bulgaria by regions (tons) 01.11.2008 – 31.10.2009 Regions Cow Buffalo Sheep Goat Total North West 122 644 1 330 13 805 15 104 152 783 North Central 145 460 3 002 7 793 8 085 163 340 North East 169 188 373 15 633 8 190 193 384 South East 186 756 914 15 770 8 776 312 216 South West 132 815 1 066 14 465 13 072 161 418 South Central 385 374 1 319 16 831 9 057 312 481 Bulgaria 1 042 137 6 804 84 297 62 284 1 195 522  1 195 522 tons of milk were produced during Y2009 and the cow milk is 87.2%.  26.1% of the total quantity of milk is produced in the South Central Region of Bulgaria; on the second place is South East Region with 17.8%; The smallest share has the South West Region with 12.8%.
    • INDUSTRY OVERVIEW  According to the data of Ministry of Agriculture and Food the real situation of milk livestock breeding in Bulgaria at 1st of November 2009 can be summarized as follows:  The number of cow breeding farms is 14,4% less in November 2009 than November 2008;  The number of milking cows has dropped by 5.7%;  The number of farms breeding 1 or 2 dairy cows is 14,3% less than in November 2008 and they breed 89 300 of dairy cows (representing c.a. 30% of all dairy cows in the country);  The number of the farms breeding 100 and more cows has increased with 22.9% - 34 200 dairy cows in total Number in cattle in Farms Milking cows a farm Number 2009/2008 Number 2009/2008 1-2 72 120 -14.3% 89 300 -15.3% 3-9 13 253 -20.7% 59 300 -19.0% 10 - 19 2 977 4.5% 40 300 -8.6% 20 and more 2 211 6.1% 107 900 9,0% TOTAL 90 561 -14.4% 296 800 -5.7%
    • INDUSTRY OVERVIEW  The data in the previous slide shows the small-sized and fractured structure of the livestock breeding in Bulgaria. The larger part of the farms is located in private yards within the settlements and most of the livestock is bred there. The milk produced by such farms is for self consumption and a part of it is supplied to the market, thus providing the farmers with additional income. The positive trend that is observed is the increase of the number of farms with 20 and more heads.  In May 2009 the number of cattle and buffalo in the livestock farms is 549 500 (6.3% decrease compared to May 2008).  The number of the cattle farms continued to decrease during the period May 2008 – May 2009 (-14.5%), but there is a trend of increasing of the average number of cattle per farm.  In May 2009 the average number of the cows in a farm was 3.5, which was 9.4% higher than the previous year. 565 farms breed 50 or more dairy cows (more than 59 000 cattle).  The share of cow in all self-subsistent farms can be estimated up to 61%.  The group of farms having more than 10 cows has grown – a growth trend in the middle-scale Bulgarian dairy sector.
    • SWOT ANALYSIS   Strengths  Weaknesses - The primary production of dairy sector relies on the - The production stage is strongly fragmented, small size predominated and self-subsistent oriented thus it does not extensive production technologies, as the price costs are dispose with economic to scale advantages and significant lessened due to the low prices of pastures and coarse possibilities for adoption of expensive technologies fodder provisions - The comparatively low level of the milk yield substantially - A significant part of the dairy farming is located in the affects the competitiveness of national dairy sector thence mountainous and lessfavoured areas, abounding with land the productivity is insufficient and subdues the overall resources, pertinent for utilization and to additional support competitiveness under CAP - Some percent of dairy farms operating mainly in plain - The dairy production in Bulgaria includes not only cow region do not have competitive advantages with other milk and is significantly diverged by the sheep and goat milk production types, as subsidies allocated by single payment (about 14% of the total) anticipating wider product supply per area turn out to be not successful mode for them. Most of the farmers are landless. - Bulgaria has strong export traditions of cheeses - A significant part of the farms in Bulgaria are run by the - The product portfolio shows the domination of very specific holders in not active age (41.4%), who consider their activity domestic dairy cheeses (brined), which are preferred by as a supplement job rather than as profitmaximizing, seeking customers and are not almost supplied from abroad thus the for expansion. MPE’s have good competitive power
    • SWOT ANALYSIS   Opportunities  Threats - About 14% of total production of milk is - The share of professional farms implementing a consistent breeding derived from sheep and goat, as especially approach are minor portion, while other self-subsistent farms hardly might be the conditions in Bulgaria are very propitious incited to change their technology for their breeding, while these sub-sectors - The development of the alternative dairy livestock (sheep, goat, buffalo) are not obliged with severe quality criteria requires extraordinary cares and measures that so far are not clearly launched and standards by the State, which undermines their development - The demographic problems in the dairy farming redounds to lack of adequate - The measures undertaken for support of motivation and low interest by farmers odernization (RDA) of the dairy production - The implementation of all EU requirements to primary and processing sector unarguably will lift up the comparative in terms of quality and traceability are posted to the insufficient progress advantages of the farms and will promotetheir - The national dairy livestock turns out to be very vulnerable from the fodder competitiveness crisis due to adverse climate conditions, diseases, etc and the drastic increase of feeding and vet costs affect production - The accession in EU renders Bulgarian - The markets of mainstream national dairy products are oriented to the niche MPE’s a possibility to trade in EU and to and community determined categories and difficultly may contest with the mass reach a great number of customers by dairy foods supplied by the other EU dairy plants competitive prices and specific tastes - Without orienting the dairy export to niche markets and establishment of stable brand and dairy product types, the export opportunities will be at stake
    • FIRST STEPS  As seen from the data so far, the dairy sector, in particular, faces serous problems, which demand rapid, adequate and result oriented approaches. The primary production within livestock sector is still very adverse, spelling for serious challenges for dairy producers in terms of modernization of their farming, improving quality and efficiency of their production, adoption of contemporary and safety technologies, etc.  stratify farmers into various groups based on size and sophistication of operations  reverse-engineer the business model (P&L) of each targeted segment  identify opportunities based on the different P&L levers from the business model  offer specific solutions to specific problems in the farmers’ business models  sell machines to either generate additional revenue or reduce operating expense  firmly believe that we sell complete solutions to problems and not pieces of hardware  grow operations with our customers, as they mature and become more sophisticated