Welcome to Switzerland!

15
Welcome to Switzerland! The Swiss milk market: organisation and development European Dairy Farmers (EDF) Congress 2014 Congress Center, Liebestrasse 3, Winterthur (Switzerland) June, 25 2014 (15:10 pm) Stephan Hagenbuch, Swiss Milk Producer‘s Association, Head economy and market affairs President Swiss Milk Commission of IDF Switzerland‘s Dairy Market an the organisations

Transcript of Welcome to Switzerland!

Welcome to Switzerland!

The Swiss milk market: organisation and development

European Dairy Farmers (EDF) Congress 2014

Congress Center, Liebestrasse 3, Winterthur (Switzerland)June, 25 2014 (15:10 pm)

Stephan Hagenbuch, Swiss Milk Producer‘s Association, Head economy and market affairsPresident Swiss Milk Commission of IDF

Switzerland‘s Dairy Marketan the organisations

3

Dairy in Switzerland

EDF Congress; Winterthur (CH)June 25, 2014

Household milk: 0.05mill. t

4

Feeding milk: 0.52 mill. t

Processing:3.43 mill. t of milk

584’000 Dairy cows23’490 Dairy farmers

Production:4.00 mill. t of milk

Switzerland‘s Dairy Market 2013 (SMP):Milk production

EDF Congress; Winterthur (CH) June 25, 2014

5

Size of dairy farms in Switzerland 2013(TSM)

June 25, 2014EDF Congress; Winterthur (CH)

2013:Dairy farmers: 23’490Average delivered: 140’660 kg Average size: 24.4 ha

6

Switzerland‘s „Milkyway“ 2013

EDF Congress; Winterthur (CH) June 25, 2014

chee

seda

iries

with

sila

gefe

ed:

2.29

mill

. tno

sila

gefe

ed:

1.14

mill

. t

Imports: 0.49 mill. t

Exports: 0.85mill. t

SMP

Assemblyof

deputes

12 regional organisations

Local cooperatives &23‘460 dairy farmers

584‘000 dairy cows

Swis

s M

ilk p

rodu

ctio

n

VMI

Board

General Assembly

Fromarte

Assembly ofdeputes

4 regional organisations

dairy

grou

ps&

smal

lsca

lecr

eam

erie

s

< IPSM >

Exports and imports of cheese

7June 25, 2014EDF Congress; Winterthur (CH)

Added value with Swiss-Quality

8June 25, 2014EDF Congress; Winterthur (CH)

Som

atic

cel

ls p

er m

L

Milk pooling (2012):

EDF Congress; Winterthur (CH) June 25, 2014 9

Cheese Dairy Milkyway 2012 (SMP)

10EDF Congress; Winterthur (CH) June 25, 2014

no silage feed

Industrial Dairy Milkyway 2012 (SMP)

11EDF Congress; Winterthur (CH) June 25, 2014

12

Consumption of „milk“ in Switzerland: 380 kg/capita (2013, IDF)

June 25, 2014EDF Congress; Winterthur (CH)

13

Swiss-Household for „food“

EDF Congress; Winterthur (CH)June 25, 2014

(CHF 1’200.--/month)

14

Switzerland‘s Dairy Market 2013:Market concentration

June 25, 2014EDF Congress; Winterthur (CH)

Production

Collecting

Processing 1st step

Retail

Consumtion

2

8’100’000

530 cheese dairies

3

retailers80 % market share

processors(~ 80 % market share)

23’400 milk producers

25pools

cheese co-operatives

Swiss Agricultural Policy Agenda

EDF Congress; Winterthur (CH) June 25, 2014 16

Farmers milk price: Review

Dairy farmers milk price 1905 bis 2014

Until 1913: liberal market situation.1914-18: World War I

1917: lack of food political measures (price control)

1922: Turn back to liberal market. Milk prices decrease very strongly.1922: Swiss dairy farmers union takes first measures (

1923: „golden 20es“; increase of exports,

1929: Word economic crisis, decrease in cheese exports, overproduction

1930: Guaranteed milk price by government1933-36: dairy quota system1938: dairy quota system

1939: World War II: Guaranteed prices

1954: policy measures in agricultural law: guaranteed prices

1977: dairy quota system

1992: New agricultural policy: farmers income depends on market price and direct payments

2007: international price rallye

2000: on-going abolition of market subsidies

1999: Abolition of price guarantee

2009: Abolition of dairy quota system

20??: surprise ??

EDF Congress; Winterthur (CH)

Cheese agreement EU-CH (bilateral agreement I):

• Reciprocal and gradually eliminate customs duties for cheese (incl. cottage cheese):

- Fully liberalised: july 2007- We depend now from EU-border protection for cheese

• Tariff quota for cream and yoghourt (2‘000 t)

Agreement for processed agricultural products EU-CH (bilateral agreement II / „chocolate law“):

• Net price compensation• New access for yoghourt, „semi-butter“, milk

beverages etc.

No change in border protection for milk, butter, SMP, WMP

Border protection and market access(Switzerland – EU)

June 25, 2014 17

There is a life after the Milk Quota

Different strategies and interests after > 30 years of milk quota! (producers, processors, policy)

EDF Congress; Winterthur (CH) June 25, 2014 19

white / yellow line

organisations

“Gold rush feeling”

big/small

quantity/price?

additional milk?

policy/market

mountains/plain

Founded: 29th June 2009 as a privat platformMembers (about 95% of all «Swiss Milk»): Family: Milk producers Family: Processors & retailers

Market-issue tools: Segmentation-system (A-,B-,C-Milk) Common contracts for A-,B-Milk, 1st and 2nd level Recommended price index for A-,B-,C-Milk Milk-Quality issues (safeguard CH standard) Information, transparency

Interprofession Swiss Milk (IPSM)

June 25, 2014EDF Congress; Winterthur (CH) 20

Milk price (and exchange rate €/CHF)

21June 25, 2014EDF Congress; Winterthur (CH)

End of support

Milk production (2006/2013)

EDF Congress; Winterthur (CH) June 25, 2014 22

Butter: stock and exports

EDF Congress; Winterthur (CH) June 25, 2014 23

Abolishment of milk quotas: Market equilibrium ...where is it? [ηm/p

>>1]

Milk price

Milk quantity

Accumulated demand

supply

„Homo oeconomicus Lactus Helveticus“ 2014?

June 25, 2014EDF Congress; Winterthur (CH) 24

-1st step (06-11)-2nd step (12-13)-3d step (13-14)-4d step (14-?)

Quantity and Milk Price

25June 25, 2014EDF Congress; Winterthur (CH)

„Milk“ ist not „milk“

26June 25, 2014EDF Congress; Winterthur (CH)

Milk priceRp./kg

0

20

100

QuantityMio. kg0 100 200 400 800 160050

40

60

80

Emmentaler AOC

Le Gruyère AOC

Appenzeller®

Tête de moine AOC Organic Milk

Tilsiter

Butter Export (C-Milch)

A-Milk, for Ex.- Fluid Milk- Butter domestic- Raw Milk-Cheese

Wiesen-milch ®

Vacherin Frib. AOC

B-Milk

Income for dairy farmers in Switzerland (Agroscope, ART)

EDF Congress; Winterthur (CH) June 25, 2014 27

Reference (2010/12) Dairy farms Dairy / cropfarms

Land 21.8 ha 30.0 ha

Cows 21 25

Farming income 54’927.-- CHF 72’034.– CHF

Non-farming income 23’’984.-- CHF 21’319.-- CHF

Total income 78’911.– CHF 93’353.– CHF

Total labour unit 1.66 1.91

Family labour unit 1.31 1.25

Income / labour unit 47’323.– CHF 61’056.– CHF

Income / family labour unit 37’780.– CHF 51’969.-- CHF

Income for dairy farmers in Switzerland (Agroscope, ART)

EDF Congress; Winterthur (CH) June 25, 2014 28

29

Conclusions for the «CH-Dairy Future»

EDF Congress; Winterthur (CH) June 25, 2014

There is a demande on the market More volatility is a fact Market focus becomes more important to the

dairy value chain (cyclic markets) A lot depends on international agreements Partners on the business line have to co-operate

for sustainable solutions:• vertical business line becomes more important• stability is important for producers, processors and retailers• Milk producers are in fact quantity adjuster and price takers

Milk market without quota requires new structures A lot of farmers realize the situation, when they

have the milk payment on the table…..

Thank you very much for your attention!

EDF Congress; Winterthur (CH) June 25, 2014 30EDF Congress; Winterthur (CH) June 25, 2014 30