GLOBAL DAIRY PRODUCTION STATUS, TRENDS, AND OUTLOOK
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Mission: We create a better understanding of the dairy world by providing comparable data, knowledge and inspiration. 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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GLOBAL DAIRY PRODUCTION STATUS, TRENDS, AND OUTLOOK
- 1. 28/09/2015 © IFCN 2015 | 1 ESADA Conference 2015 GLOBAL DAIRY PRODUCTION STATUS, TRENDS, AND OUTLOOK Dr. Dorothee Boelling IFCN Dairy Farm Analysis Dorothee.Boelling@ifcndairy.org
- 2. 28/09/2015 © IFCN 2015 | 2 Agenda 1. The IFCN concept 2. Milk prices and their drivers 3. Outlook 2025 4. Summary
- 3. 28/09/2015 © IFCN 2015 | 3 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.
- 4. 28/09/2015 © IFCN 2015 | 4 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
- 5. 28/09/2015 © IFCN 2015 | 5 IFCN – an ongoing knowledge creation system
- 6. 28/09/2015 © IFCN 2015 | 6 Agenda 1. The IFCN concept 2. Milk prices and their drivers 3. Outlook 2025 4. Summary
- 7. 28/09/2015 © IFCN 2015 | 7 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.
- 8. 28/09/2015 © IFCN 2015 | 8 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 0 100 200 300 400 500 600 700 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 National milk price Combined IFCN world milk price indicator 0 10 20 30 40 50 60 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 National milk price Combined IFCN world milk price indicator South Africa
- 9. 28/09/2015 © IFCN 2015 | 9 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
- 10. 28/09/2015 © IFCN 2015 | 10 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
- 11. 28/09/2015 © IFCN 2015 | 11 0 2 4 6 8 10 12 14 16 18 20 22 24 26 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015 mill.tmilk(ME)/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 perspective World milk demand growth in mill t/year Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
- 12. 28/09/2015 © IFCN 2015 | 12 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 bound January 2015 in % >15% >-15% <= 15% <= -15% no data 2. Dairy demand perspective Milk consumption per capita in kg ME per capita Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025 50
- 13. 28/09/2015 © IFCN 2015 | 13 3. Dairy supply perspective Average annual regional change in milk production 2014 vs. 2009
- 14. 28/09/2015 © IFCN 2015 | 14 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 0 5 10 15 20 25 30 35 40 45 50 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Margin over compound feed costs (0.3 kg/kg milk) Bound - average 2007-2014 0 10 20 30 40 50 60 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 World milk price World feed price -3% -2% -1% Change in milk production on monthly basis -3% -2% -1% 0% 1% 2% 3% 4% 5% Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 % change to previous year Long 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) 0 10 20 30 40 50 60 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 World milk price World feed price
- 15. 28/09/2015 © IFCN 2015 | 15 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
- 16. 28/09/2015 © IFCN 2015 | 16 IFCN Baseline method creating country fact sheets 1996 – 2025 Supply & demand balance Milk supply, demand, Imports/export Self sufficiency Milk demand details % growth / year Population Per capita consumption Milk supply details % growth / year Cows & milk yield Farm number and size © IFCN 2015 for internal useSource: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
- 17. 28/09/2015 © IFCN 2015 | 17Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015 Dairy world in 2025 – Milk demand
- 18. 28/09/2015 © IFCN 2015 | 18 Dairy World in 2025 – Milk supply Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
- 19. 28/09/2015 © IFCN 2015 | 19 14% 43% 19% 38% 54% 33% 27%35% World milk production growth until 2025 Absolute 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
- 20. 28/09/2015 © IFCN 2015 | 20 IFCN Dairy Outlook for Africa 2025
- 21. 28/09/2015 © IFCN 2015 | 21 Dairy World in 2014 and 2025 IFCN Baseline– produced in 3/ 2015 Unit Annual values 2014 2025 Change 2025 vs 2014 % % / year Milk Supply & Demand* mill t ECM 819 1059 29% 2.4% Supply Drivers Number 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 Drivers Population 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
- 22. 28/09/2015 © IFCN 2015 | 22 Agenda 1. The IFCN concept 2. Milk prices and their drivers 3. Outlook 2025 4. Summary
- 23. 28/09/2015 © IFCN 2015 | 23 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.
- 24. 28/09/2015 © IFCN 2015 | 24 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
Editor's Notes
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- Demand main facts in 2014: a) Per capita consumption: 113 kg ME ~ +1.6% vs 2013 b) Population: 7.2 bill ~ +1.2% vs 2013 c) Why such high demand growth? a high per capita consumption increase +1.8 kg ME. Normal annual growth of consumption per capita is 1.2 kg ME but due to low milk availability there was no growth in 2013. * Total demand: population demand + possible stocks
- Us and brazil new growth, china moving backwords Latin America, 5 highest increasing regions, 2 for India, biggest 2 decrease CN, check LW file, highest increase, highest decrease Country data: Milk production 2014 (cow and buffalo) in ECM. Regional data: Milk production 2014 (cow and buffalo) in natural fat and protein content. If not available 2013 data was taken for IN, NZ, 2011 for AR.
- Cena zaczela spadac w Marcu produkcja w October 2.9% od marca 7 m-cy November 2.2% wiec od marca 8 miesiecy
- USA, EU, Pak, Brazil: 15 – 17 mill t; TR + NZ: 6 – 7.5 mill t; IN: + 60 mill t