Diary industry
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In many respects the dairy industry occupies a special position among the other sectors of agriculture. Milk is produced everyday and gives a regular income to the numerous small producers. Milk production is highly labour-intensive and provides a lot of employment.
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Diary industry
- 1. 1 In manyrespectsthe dairyindustryoccupiesaspecial positionamongthe othersectorsof agriculture. Milkis producedeverydayandgivesaregularincome tothe numeroussmall producers.Milkproduction ishighlylabour-intensive andprovidesalot of employment. Anditiskindof ‘white gold’whichcanbe processedtoformmany milkproductslike cheese,butter&yogurtthatare majorlyusedinmanydishes as itscomponents. These milkproductsaddtaste toa verysimple dishandhence consumedbypeople all overthe world. The whirlwindof changes,whichispassingthroughthe world,isalsoexercisingagrowinginfluenceon the dairyindustry.The numberof milkproducersis increasingrapidly,the dairyprocessingindustryis becomingmore andmore highlyconcentrated,the international dairymarketsare increasingly liberalisedandare givinggreateropportunitiestolow costproducers,includingmanyfromdeveloping countries. The compositionof dairyproductconsumptionvariesacrossdifferent regionswithliquidmilkasthe overall mostimportantproductbyvolume.However,processeddairyproductsbecome more important withincreasingincomesandlivingstandards,andindevelopedcountriesthe trendgoesmore andmore towardshighvalue functional foodsthatrequire considerable researchinvestmentsandsophisticated processing.
- 2. 2 Two modelsof doing businessinDairy industry: UnorganizedDairy Enterprises Here,milkissolddirectlyfromthe milk parlours toconsumers,local confectionariesorrestaurants. These are verysmall-scale businesseswhichcatertoonlylocal marketswithlimitednumberof dairy products. OrganizedDairy Enterprises A. Private Dairies Privatedairies are the enterpriseswho own the milk parlouron their own,and then they processtheir milk into valueadded products.ParagMilkFoodsis India’slargestprivate dairyandmanufacturersof the Gowardhanand Go range of milkandmilkproducts. Saputo Inc. isa Montreal-basedCanadiandairy company.Saputo'sbusinessincludesdairyproducts,anditisthe tenthlargestdairyprocessorsinthe world.MüllerWisemanDairies(formerlyRobertWisemanDairies) isone of the largest milksuppliers and distributorsinGreatBritain.Itispart of the MüllerUK & IrelandGroup B. DairyCo-operatives A dairy cooperativeis a business,which is owned and controlled by the dairy farmerswho producethe milk used by the cooperative. Thisstructure consistsof adairy cooperative societyatthe village level affiliatedtoa milkunionatthe districtlevel whichinturnisfederatedintoamilkfederationatthe state level.Milkcollectionisdone atthe village dairysociety,milkprocurementandprocessingatthe District MilkUnion andmilkproductsmarketingatthe state milkfederation. Here all small-scale dairy enterprisescome togethertoforma large co-operative,thisresultsinlargerreachof theirproductswith large profits. In the UnitedKingdom,all the milkproducedbyfarmersisprocuredbythe cooperatives.Privatedairies arerequiredtobuytheirmilkrequirementfromcooperatives.New Zealandhasnoprivate sectordairy plants.As manyas90% of dairiesinthe erstwhile WestGermanyand 100% inDenmark,Netherlandsand Swedenareinthe cooperative sector. Inthe UnitedStates, 70% of the dairyindustryiscooperative. In India,Dairyco-operativesaccountsfor60% share of processedliquidmilkmarket. Alsothere are about 170 milkProducerco-operative unions. In India,GujaratCo-operative MilkMarketingFederationLtd.(GCMMF) famousfor‘Amul’productsisa perfectexampleof co-operative dairy.DairyFarmersof America Inc. (DFA) is national milkco-operative whichisownedandservedbynearly15,000dairy farmersrepresentingmore than9,000 dairy farms. Arla Foods isan International cooperative basedin Århus,Denmark,andthe largestproducerof dairy productsin Scandinavia.ArlaFoodsisthe seventhlargestdairycompanyinthe worldmeasuredby turnover.Dairy Farmers isone of the largestandoldestdairymanufacturersin Australia.FonterraCo- operative GroupLimited is a NewZealandmultinationaldairyco-operativeownedby10,600 New Zealandfarmers.Itisfourthlargestcompanyworldwide onthe basisof itturnover.UnitedDairy Farmers isa leadingUKdairyco-operative ownedbyfarmermembersinNorthernIreland,Englandand Scotlandwitha turnoverinexcessof £400 millionperyearandemployingaround1,000 people.
- 3. 3 Major Milk ProducingCountries India- World’slargest producer ofMilk Indiaisthe world'slargestproducerand consumerof milk.In2013, total annual productionof milk in Indiaisestimatedtobe 132.4 milliontonnes,enoughmilktofillover44,000 Olympicsizedswimming pools!Recentyearshave seenasignificantgrowthinmilkproductioninIndiadue todevelopmentof large co-operatives. With17%share of global milkproduction,Indiandairyindustryisundergoing transformational change. AlsoIndiatodayisthe lowestcostproducerof perlitre of milkinthe world,at 27 cents,comparedwiththe U.S' 63 cents,andJapan’s$2.8 dollars. Indiaproduces46.57milliontonnes of cow’smilk.Here milkproductionisgrowingat7% by volume andapproximately10% byvalue.In 2012, India was the largestproducer of goat and buffalo’smilk,producing4.85 millionmetrictonnes and 66 millionmetrictonnesof milkrespectively. Indiahardly exports Milk.But,scenariowill be change soonwiththe participationfromprivate sectorsis estimatedtobe increasing,leadingtothe growthof more organizedformof businessinthe dairy industry. Indianow isall setto become the world'slargestfoodfactory.Incelebration,IndianDairy sectoris nowreadyto invite NRIsandForeigninvestorstofindthis countrya place forthe mammoth investmentprojects.Be itinvestors,researchers,entrepreneurs,orthe merelycurious –IndianDairy sectorhas somethingforeveryone. However,the efficiencyof the Indiandairyingsectorisabysmally low.Evendairying ispredominantlyunorganisedandthe sectorisdependentonrural householdsfor supplies. Alsoto take advantage of thislowestcostof milkproductionandincreasingproductioninthe country multinationalcompaniesare planningtoexpandtheiractivitieshere.Some of these milkproducershave alreadyobtainedqualitystandardcertificatesfromthe authorities.Thiswill helptheminmarketingtheir productsin foreigncountriesinprocessedform.Organizedmarketisgrowingat10% invalue terms annuallywhichwill furtherboostthe dairyindustry. GujaratCo-operativemilkMarketing Federation Limited (GCMMF) –AmulProducts,ParagMilkFoods, Aarey Milk, MotherDairy are some of the keyplayersfromIndiandairyindustry. The international dairytrade isdominatedby fourplayers- EU,NewZealand,Australia and USA - which togetheraccountfor 85% of all exports.New ZealandandAustraliaexportasmuch as 80% and 50% of theirmilkproductionrespectively.
- 4. 4 Europe Union Milkis producedineverysingle EUMemberState withoutexception.Furthermore,milkisthe EU numberone single productsectorintermsof value at approximately15% of agricultural output.The EU isa majorplayerinthe worlddairymarketas the leading exporterof manydairyproducts,mostnotably cheeses. The EU's mainproducersare Germany,France,the UnitedKingdom, the Netherlands,ItalyandPoland whichtogetheraccountformore than70% of the EU production. NewZealand Dairyfarmingis part of a longandproud agricultural traditioninNew ZealandTheprincipal manufacturersof dairyproductsinNewZealandare membersof the DairyCompaniesAssociationof NewZealand.NewZealanddairyproductsare promotedaroundthe worldwithdistinctive brandssuch as Fernleaf,Anchor,Kapiti,Anlene,AnmumandFresh‘nFruity.However,the vastmajorityof New Zealanddairyproductsare usedas ingredientsinconsumerproductssoldunderglobal brands. . New Zealandnowproducesmore than100 categoriesof dairyproducts. The dairy industryhadexportsalesof more than$6.3 billionin2007, makingit New Zealand’sleading exportearner. NewZealandsells95%of itsdairy productsabroad,whichisa greaterproportionthan any othercountry. UnitedStates In 2013, the UnitedStatestoppedthe rankingwithacow milkproductionquantityof about91.27 millionmetrictons. U.S.dairyfarmsproduce roughly23 billiongallonsof milkannually.The average dairycow producesnearly7 gallonsof milkperday. There are dairy farmsinall 50 statesandPuerto Rico.Dairy isthe numberone agricultural businessin California,Idaho,Arizona,Utah,New Hampshire, Michigan,NewMexico,NewYork,Pennsylvania,Vermontand Wisconsin.Californiaisresponsible for 21.3% of the U.S.milksupply – more than anyotherstate. In 2012, US was the largest producer ofmilk in the world producing 90 millionmetrictonnes ofmilk. The U.S. dairy industryisestimatedat$140 billionineconomicoutput,$29 billioninhousehold earnings,andmore than900,000 jobs(basedoneconomicanalysisof directandindirecteconomic impactof U.S. dairyfromfarm throughprocessing). Afimilk,a farmin Isreal, isone of the world’stopmilkproducers whogets40,000 litresof milkaday from950 cowswitheach giving42 litres.Apartfromthese countries,China,PakistanandAustraliais alsoamong the majorproducerof milkaroundthe global.IndiaandPakistan’scombinedannual productionof buffalomilkaccountsforalmost80% of the buffalomilkproduction inthe world. Apartof it, China wasthe largest producerof sheep’smilkin 2012, producing 1.58 million metric tonnesof milk. Pakistan also produced 23 million metric tonnesof buffalo’smilkwhich is second highestin the world. The EuropeanUnion- EU28, Indiaand the US are the largestmilkproducers andare expectedtoremain so in2020. However,the share of IndiaandChinaare projectedtoincrease.New Zealand,EU-28, Australiaandthe US are the largestexportersof Milk. New Zealandandthe US exportsare forecast to increase considerably.Russia,ChinaandMexicoare the largestimporters. Argentinaisexpectedto become a largerexporterof milkproducts.
- 5. 5 Thisdairyindustryisthe sector withthe highestdegree of protectiondue tothe economically vulnerable positionof small milkproducers.Milk - alsoknownaswhite gold - can be usedtomake an enormousvarietyof highqualityproducts.The highcostof milkasa raw material hasnecessitateda high-techprocessingindustry.The special nature of milk(perishableandbulky) leadstothe necessityof strict andcomprehensivequalityregulationandtohightransportcosts.The large dependence of milk producersonthe dairyprocessingindustryhasresultedinastrongpositionheldbythe co-operativesin milkmarketingandinthe processingindustry. Inall we cansay itis alreadymatured industryinthe developedregions andare alsoboomingata fasterpace in Asiancountries.