News

A glimpse to the international dairy sector

Participants:

90 participants from 65 dairy related companies

On 26th to 28th of September 2011 in Monastier (TV) and Thiene (VI), Italy, the leading dairy related companies came together to receive the latest global information about milk production and the overall sector developments.

The event focused on the key developments in milk production, milk prices and milk production costs 2000 - 2010. Moreover, the IFCN provided the participants an outlook, long-term into the year 2020 and short-term for the years 2012-2013. The conference was scheduled from 26 to 28 September 2011, in Monastier (Treviso) and Thiene (VI), Italy.

IFCN is a network operating at international level involving researchers, farmers and dairy related companies. It operates in 90 countries and represents 95% of milk production world-wide. Its mission is to create a better understanding of milk production world wide.

This event was held for the first time in Italy hosted by the Italian companies Brazzale, InterPuls and Parmalat, bringing together 90 participants representing dairy researchers, dairy farmers and representatives from over 65 global leading companies related to milk production. These companies represent all aspects of the dairy chain like milk processing, milking equipment, feeding, farm machinery, animal health, hygiene, genetics and milk packaging.

The meeting was an important moment of debate, in the light of the fact that in face of current global supply of 700 million tonnes of milk, is expected a demand of 900 million tonnes in 2025. The big question is who will be able to produce so much milk, an amount which is equal to 18 times the Italian production.

Within the period 2006-2010 most of the main milk producing countries increased milk production. Among them significant increase is observed in India, in Brazil, in USA and in China, while EU-27 is showing a very limited trend increase due to the quota regime. The increasing importance of India and China is also evident looking at the global ranking of the processing industry, where Indian and Chinese companies are gaining importance in terms of milk processed.

IFCN has also investigated the world wide farm structure showing during the conference a very interesting simplified picture of the farm type distribution in the world considering three farm categories. Households farms, breeding 1-3 cows/buffaloes, representing 75% of the dairy world farms. This farm type contributes “only” to 30-40% of the world milk production. It is estimated, that around 50% of the milk produced in these farms is consumed by the family, whereas the rest of the milk is sold locally and often to an informal market. Milk selling is providing the daily cash for the family subsistence. Family farms represent 24% of the world dairy farms producing about 40-50% of the world milk. Farm size in this category is highly variable from 10 to 300 cows. Labour input is mainly provided by family members. The economic aim of these farms is to generate a sufficient income for the family members and to pass the activity to the next generation. Business farms are only a small portion of the world dairy farms, estimated to be about 0.4% of the total farm number but producing about 10-20% of the world milk production. Usually their size is above 300 cows and all labour input is provided by employees. The aim of these enterprises is to generate the expected return on investment.

This classification is important to understand on different levels (global, national, regional) the possible developments and scenarios in specific dairy regions. It is for example the case of Denmark, where in 1996 there were about 15,000 farms with an average farm size of 47 cows and in 2010 the number of farms was 4,000 with an average farm size of about 140 cows. This example could show the future development of the dairy sector in many European regions once the quota system would not be in force anymore.

Another interesting session presented was on milk production costs. Recent trends are in fact showing a significant increase in milk production costs all over the world including countries like China, India and Brazil where only a few years ago the level of milk production costs have been significantly below the world average level.

A focus on the Italian dairy sector was debated during the panel discussion entitled “What can the world learn from Italian dairy" hosted in the Municipal Theatre of Thiene. The debate, moderated by Torsten Hemme (Managing Director of IFCN) included farmers and dairy related companies. The introduction on the Italian dairy sector was presented by Alberto Menghi from CRPA (IFCN’s Italian scientific partner). Italian dairy farmers Dino Mellano and Paolo Grandene underlined the necessity to improve farm efficiency to be more competitive on the international arena. At the same time they mentioned the need to invest in good marketing channels for their milk and to guarantee diverse source of income (solar power for example) in order not to rely 100% on milk production in times of price volatility. The hosting companies represented by Paolo Cobianchi (Parmalat), Gabriele Nicolini (InterPuls) and Roberto Brazzale (Brazzale Spa) also mentioned as key issues for the Italian dairy sector efficiency and production cost reduction. At the same time they mentioned the need to be ready to manage new technologies and challenges such as the end of milk quota regime or the use of GMOs for animal feeding. All participants did in general show a positive attitude towards the future of the dairy sector in Italy.

For more information www.ifcndairy.org

Contact: Torsten Hemme – Managing Director of the IFCN - torsten.hemme@ifcndairy.org