Current Status of Milk Production Worldwide and Expected Development to 2025
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Transcript of Current Status of Milk Production Worldwide and Expected Development to 2025
06/10/2015 © IFCN 2015 | 1
IDF Conference 2015 Lithuania
Current Status of Milk Production Worldwide
and Expected Development to 2025
Dr. Torsten Hemme
IFCN Dairy Research Network
06/10/2015 © IFCN 2015 | 2
World milk price and its volatility
Monthly data 2006 - 2015
0
10
20
30
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60
70
J 0
6
J 0
7
J 0
8
J 0
9
J 1
0
J 1
1
J 1
2
J 1
3
J 1
4
J 1
5
in U
S-$
/ 1
00
kg
EC
M 4
% f
at,
3,3
% p
rote
in
+40%
-50%
+40%
-50%
Combined IFCN world milk price indicator: weighted average of 3 IFCN world milk price indicators: 1. SMP & butter (35%), 2. Cheese & whey (45%), 3. WMP (20%)
06/10/2015 © IFCN 2015 | 3
Lithuania
How much does the world market affects my
country? Milk price transmission in USD
Source: D3.4 - IFCN Monthly real time data
USA Germany
06/10/2015 © IFCN 2015 | 4
Agenda
1. The IFCN concept
2. Milk production trends
3. Outlook 2025
4. Summary
06/10/2015 © IFCN 2015 | 5
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 – of a three pillars
- the network of researchers,
- the network of companies/institutions and
- the IFCN center with > 15 dairy economists.
06/10/2015 © IFCN 2015 | 6
Research partners in 100 countries
Status of the IFCN Network in 2015
Supporting partners (> 100)
Institutional partners
57 Countries where we collect farm economic data & country data
43 Countries where we collect country profile data
06/10/2015 © IFCN 2015 | 7
3
1 11
6
9
12
2
4
5
10
8
Activities
in the
different
months of
the year
IFCN - An ongoing knowledge creation system
IFCN Dairy Conference IFCN Supporter Conference
Data collection,
validation & analysis
Kick off meeting Kiel IFCN Regional Workshop
7
06/10/2015 © IFCN 2015 | 8
Agenda
1. The IFCN concept
2. Milk production trends &
drivers
3. Outlook 2025
4. Summary
06/10/2015 © IFCN 2015 | 9
0
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28
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0
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201
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4
201
5
mil
l. t
mil
k (
EC
M)
/ ye
ar
Change in mill t / year
17 mill t
World milk production growth 1996 – 2014
Cows & Buffalo milk at 4% fat / 3,3% protein
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
06/10/2015 © IFCN 2015 | 10
IFCN World milk production growth by month Change per month to month previous year
Explanation: Relative change of the 12-months rolling sum of milk production expresses the relative deviation of milk production in a 12 month period compared to the same period one year before.
Countries included represent 92% of world milk production. Data is adjusted for leap year effect.
Key facts of this data base 1. 60 countries (>90% world milk)
2. ECM corrected (4% fat, 3,3% protein)
3. Leap year adjusted
4. Real time estimates (1-3 month)
5. Updates (mid of each month)
A useful tool top better predicts milk dairy market developments.
Source: D3.4 - IFCN Monthly real time data
06/10/2015 © IFCN 2015 | 11
World milk supply growth is driven by farm
economics (mainly milk/feed prices)
Change in milk production on monthly basis
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Jan 0
7
Jan 0
8
Jan 0
9
Jan 1
0
Jan 1
1
Jan 1
2
Jan 1
3
Jan 1
4
Jan 1
5
% change to previous year
Long term average 2007-2014
milk production % growth:
very good good poor very poor
Country codes:
1 Austria 26 Spain 51 New Zealand
2 Belgium 27 Sweden 52 Bangladesh
3 Bulgaria 28 United Kingdom 53 China
4 Croatia 29 Armenia 54 India
5 Cyprus 30 Azerbaijan, Republic of 55 Indonesia
6 Czech Republic 31 Belarus 56 Japan
7 Denmark 32 Kazakhstan 57 Pakistan
8 Estonia 33 Kyrgyzstan 58 Iran
9 Finland 34 Moldova, Republic of 59 Egypt
10 France 35 Russian Federation 60 South Africa
11 Germany 36 Tajikistan
12 Greece 37 Ukraine
13 Hungary 38 Uzbekistan Aggregates
14 Ireland 39 Switzerland 79 Top importers (RU, CN, JP, MX, KZ, EG)
15 Italy 40 Turkey 80 Top exporters (EU,US,NZ,AU,BR,AR,UY)
16 Latvia 41 Canada 81 EU-28 aggregate
17 Lithuania 42 United States of America 82 EU-15
18 Luxembourg 43 Argentina 83 EU-13 new
19 Malta 44 Brazil 84 CIS
20 Netherlands 45 Chile 85 North America
21 Poland 46 Colombia 86 Latin America
22 Portugal 47 Mexico 87 Oceania
23 Romania 48 Peru 88 Asia
24 Slovakia 49 Uruguay
25 Slovenia 50 Australia 90 World market
Source: D3.4 - IFCN Monthly real time data
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
Jan 0
7
Jan 0
8
Jan 0
9
Jan 1
0
Jan 1
1
Jan 1
2
Jan 1
3
Jan 1
4
Jan 1
5
Margin over compound feed costs (0.3 kg/kg milk)
Bound - average 2007-2014
0
10
20
30
40
50
60
Ja
n 0
7
Ja
n 0
8
Jan 0
9
Jan 1
0
Ja
n 1
1
Ja
n 1
2
Jan 1
3
Jan 1
4
Ja
n 1
5
World milk price
World feed price
-3%
-2%
-1%4.3
8.7
13.0
17.3
21.6
Milk prices in USD/100 kg (ECM)
0
10
20
30
40
50
60
Jan 0
7
Jan 0
8
Jan 0
9
Jan 1
0
Jan 1
1
Jan 1
2
Jan 1
3
Jan 1
4
Jan 1
5
World milk price
World feed price
4.3
8.7
13.0
17.3
21.6
26.0
06/10/2015 © IFCN 2015 | 12
Dairy farm economic indicator– real time Based on national margin over compound feed cost vs bound defined
Compound feed intensity
• 50 g/kg milk – NZ, 300 g/kg milk – World, US, DE, LT, BR, RU
Bound:
• Average 2007-2014 – World, US, DE, LT, NZ Trend line – BR, RU
• -15% light red
• ≤-15% dark red
Distance to bound
• ≥15% dark green
• +15% light green farm economics:
very good good poor very poor
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A
World market 0 0 1 1 3 3 2 2 2 2 2 2 2 2 2 3 3 3 3 3 1 0 0 0 0 0 0 0 0 0 0 0 0 0 3 3 1 1 1 3 3 3 1 1 1 1 1 1 3 2 2 3 3 3 3 3 3 1 1 3 3 1 1 0 0 0 0 0 0 1 1 1 1 1 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 1 1 1 0 0 0 1 1 0 0 0 0 0
United States of America 0 0 1 1 3 2 2 2 2 2 2 2 3 3 1 1 3 3 3 3 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 1 1 1 1 1 1 0 0 1 3 3 3 2 2 2 2 3 3 3 1 1 1 0 0 0 0 1 1 3 3 3 1 1 1 1 1 1 1 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 3 1 1 1 1 1 1 1 1
Germany 0 0 0 1 1 1 3 3 2 2 2 2 2 3 3 3 3 1 1 3 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 3 3 3 3 3 3 1 3 3 3 3 3 3 3 3 2 3 3 3 3 1 1 1 0 0 1 1 3 3 1 1 1 1 1 3 3 3 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 1 1 1 1 1 1 0 0 0
Lithuania 0 0 0 0 0 0 0 0 1 2 2 2 2 2 2 3 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1 3 1 1 1 1 1 1 1 1 1 3 3 3 3 3 2 2 2 3 3 3 3 3 2 2 2 2 3 3 0 0 0 0 0 1 1 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 3 3 3 1 0 1 1 1 0 0 0 0 0 0 0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: D3.4 - IFCN Monthly real time data
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A
New Zealand 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Brazil 1 0 1 1 1 3 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 1 1 0 0 0 0 0 0 1 3 2 3 3 1 0 0 0 1 3 3 3 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 1 1 1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 1 3 2 2 2 2 3 1 1 1 3 3 3 3 3 3 3 3 1 1 0 0 1 1 1 1 1
Russian Federation 1 1 1 1 1 1 0 1 1 2 2 2 2 2 2 2 2 1 1 3 3 3 3 1 1 1 1 1 0 0 0 0 0 0 1 1 1 3 3 3 1 1 1 3 2 2 2 2 2 2 2 3 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 1 1 1 1 1 0 0 0 1 1 1 3 3 2 2 2 2 2 3 3 3 3 3 3 3 3 2 2 2 3 3 3 1
2007 2008 2009 2010 2011 2012 2013 2014 2015
06/10/2015 © IFCN 2015 | 13
Real time farm economic indicator – An estimation for August 2015 based on margin over compound feed costs
60 countries analysed: EU-28, CIS: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine , Uzbekistan,
USA & Canada: Canada, USA, Latin America: Argentina , Brazil , Chile , Colombia , Mexico, Peru, Uruguay, Oceania: Australia, New Zealand, Asia: Bangladesh, China, India, Indonesia,
Japan, Pakistan, Africa: Egypt, South Africa. Other: Switzerland, Turkey, Iran. Countries included represent 92% of world milk production. Data is preliminary or estimated.
06/10/2015 © IFCN 2015 | 14
Latest milk supply trends IFCN real time estimate August 2015 vs. 2014
Milk produced or delivered in countries analysed. See country list below.
EU-28
60 countries analysed: (p = milk production, d = milk delivery): EU-28:(d), CIS: Armenia (p), Azerbaijan (p), Belarus (p), Kazakhstan (p), Kyrgyzstan (p), Moldova(p), Russia (p), Tajikistan (p),
Ukraine (p), Uzbekistan (p),
USA & Canada: Canada (d), USA (p), Latin America: Argentina (p), Brazil (d), Chile (d), Colombia (d), Mexico (p), Peru (d), Uruguay (d), Oceania: Australia (p), New Zealand (p), Asia:
Bangladesh (p), China (p), India (p), Indonesia (d), Japan (p), Pakistan (p), Africa: Egypt (d), South Africa (p). Other: Switzerland (d), Turkey (d), Iran (p). Countries included represent 92% of
world milk production. Data is preliminary or estimated.
06/10/2015 © IFCN 2015 | 15
Agenda
1. The IFCN concept
2. Milk prices and
their drivers
3. Outlook 2025
4. Summary
Since 2012 IFCN has done 10
year dairy outlooks called IFCN
Baseline. For this we have
beliefs:
1. Predicting the
future shall be done in
a dialogue.
2. Predicting the future
shall be a continuing
process.
06/10/2015 © IFCN 2015 | 16
IFCN Baseline technical assumptions Long term – indicators are on that level or will tend towards the defined level.
• Global GDP growth 3.8% - 4.0% (IMF 10/2014)
• World demand growth for milk 2.4% - 2.5% (IFCN estimation based on scenario 1)
• Oil price –75-80 USD/barrel in 2025 (IMF 2/2015)
• Exchange rate 0.85 EUR/USD (EU Commission, 1/2015)
• Weather – average condition (IFCN assumption)
• Policy – no distortion (moving in line with IFCN scenario 1 defined)
• World feed price 30 USD/100 kg feed (OECD-FAO Outlook 7/2014)
• World milk price 44.5 USD/100 kg ECM = 19.3 USD/CWT (result based on milk
supply/demand balance)
Technical descriptions:
1. Prices and GDP growth in real terms.
2. World milk price is a result of an iterative process simulating world milk supply and demand growth per country
and results of the annual IFCN cost of milk production analysis.
Sources: IMF, OECD-FAO, EU Commission, IFCN estimations
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
06/10/2015 © IFCN 2015 | 17
IFCN Baseline method - creating country fact sheets
1996 – 2025 for supply and demand
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 use
0
10
20
30
40
50
60
70
80
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
mil
l t m
ilk
(M
E o
r E
CM
)
Milk supply and demand
IFCN milk production (all milk)
Dairy consumption
-30
-25
-20
-15
-10
-5
0
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
mil
l t m
ilk
(M
E)
Milk balanceSurplus / Deficit
average 1996-2013
0%
20%
40%
60%
80%
100%
120%
19
96
19
98
20
00
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02
20
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20
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20
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20
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20
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20
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20
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20
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20
24
Self sufficiency in milkSelf sufficiencyaverage 1996-2013
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Milk production changes
Change in milk production
average 96-06, 06-13
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
t m
ilk (E
CM
)/ h
ead
/ y
ear
mil
l he
ad
National herd size and average milk yield (cow and buffalo)
Number of milk animals
Average milk yield
0
20
40
60
80
100
120
140
160
180
200
0
500
1,000
1,500
2,000
2,500
3,000
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
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16
20
18
20
20
20
22
20
24
mil
k a
nim
als
/ farm
farm
s in
1,0
00
Farm number and size
Farm numberAverage farm size
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
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24
Total consumptionChange in dairy consumptionaverage 96-06, 06-13
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Population in million people
0
5
10
15
20
25
30
35
40
45
50
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
kg
milk (M
E)
/ cap
ita / y
ear
Milk consumption per capita
06/10/2015 © IFCN 2015 | 18
Dairy World in 2014 and 2025
IFCN Baseline– produced in 3/2015
Unit Annual values 2014 2025
Change 2025 vs 2014 Absolute % CAGR %/ year
Milk Supply & Demand* Mill t ECM 819 1059 241 29% 2.4%
Supply Drivers
Number of milk animals Mill head 364 407 44 12% 1.0%
Average milk yield t/milk animal/year 2.2 2.5 0.3 16% 1.3%
Dairy farm number Mill 120 101 -20 -16% -1.6%
Average farm size Head/farm 2.9 3.8 1.0 34% 2.7%
Demand Drivers
Population Billion 7.2 8.2 1.0 14% 1.2%
Demand per capita Kg ME/ capita/year 113 129 16 14% 1.2%
World dairy trade** Mill t ECM 54 99 44 82% 5.6%
IFCN Baseline: This ís an annual approach done by IFCN each year in February / March
* 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
06/10/2015 © IFCN 2015 | 19
Dairy world in 2025 – Milk demand
Population in million people
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
199
61
99
82
00
02
00
22
00
42
00
62
00
82
01
02
01
22
01
42
01
62
01
82
02
02
02
22
02
4
Change in dairy consumption
average 96-06, 06-13
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
199
61
99
82
00
02
00
22
00
42
00
62
00
82
01
02
01
22
01
42
01
62
01
82
02
02
02
22
02
4
0
20
40
60
80
100
120
140
199
61
99
82
00
02
00
22
00
42
00
62
00
82
01
02
01
22
01
42
01
62
01
82
02
02
02
22
02
4
kg
mil
k (
ME
) / c
ap
ita / y
ea
r
Milk consumption per capita Milk demand growth % / year
Average growth of population +1.2%
Average growth of per capita consumption +1.2%
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
06/10/2015 © IFCN 2015 | 20
Dairy World in 2025 – Milk supply
World herd size and average
milk yield (cow & buffalo)
0
200
400
600
800
1000
1200
199
61
99
82
00
02
00
22
00
42
00
62
00
82
01
02
01
22
01
42
01
62
01
82
02
02
02
22
02
4
mil
l t
mil
k (
ME
or
EC
M)
IFCN milk production(all milk)Dairy consumption
0,0
0,5
1,0
1,5
2,0
2,5
3,0
0
50
100
150
200
250
300
350
400
450
199
61
99
82
00
02
00
22
00
42
00
62
00
82
01
02
01
22
01
42
01
62
01
82
02
02
02
22
02
4
t m
ilk
(E
CM
)/ h
ea
d / y
ea
r
mil
l h
ea
d
Number of milkanimalsAverage milkyield
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
199
61
99
82
00
02
00
22
00
42
00
62
00
82
01
02
01
22
01
42
01
62
01
82
02
02
02
22
02
4
mil
k a
nim
als
/ f
arm
farm
s in
1,0
00
Farm number
Average farm size
Farm number and size Milk supply and demand
Supply & demand Average growth 2.4%
Average growth No of animals 1.0% Aver. milk yield 1.3%
Average growth Farm no -1.6% Aver. farm size 2.7%
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025, status 3/2015
06/10/2015 © IFCN 2015 | 21
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
ECM- Energy Corrected Milk; 4% fat, 3.3% protein
Africa43%
06/10/2015 © IFCN 2015 | 22
Summary
• World market price for milk are very volatile and drive national milk
prices.
• Milk supply growth can meet demand growth once milk prices, feed
prices, weather and politics are „reasonable“.
• Real time information for 60 countries on milk supply is available.
Correlation between farmers margin and milk supply was found and is
a tool to better to estimate the future.
• Dairy Outlook for one scenario: In 2025 we produce and consum
241 mill t more milk. This will be 3 times the US milk production. 80%
of this additional milk will produced locally, 20% will be traded from
milk surplus to deficit regions.
06/10/2015 © IFCN 2015 | 23
Thank you for your attention
Dairy
Research Center
in Kiel
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.