Estonian Dairy Sector 2004

Tiina Saron, MBAEstonian Dairy Associationmanaging director

Overall introduction

% 1996 1998 2000 2001 2002 2003 2004

Share ofmilkproductionin GAO

27 28 29 31 31 28 30

Share ofmilkprocessingin foodindustry

26 28 28 30 27 26 32

Share ofmilk in foodexports

33 32 28 25 22 20 22

Source: ESO

Milk production

0

200

400

600

800

1000

1200

1400

19

25

19

50

19

75

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

0

1

2

3

4

5

6

7per cow, EU

per cow, EST

total, EST

th tonnetonne

Per Cent of Dairy Cows Living in Herds with the Respective Size

Estonia

1-9 cows 7%

10-49 cows14%

50-99 cows 7%

100+ cows 72%

Denmark

1-9

cows 0%

50-99 cows 49%

10-49

cows24%

100+ cows 27%

France

10-49 cows60%

50-99 cows 35%

1-9 cows

1%

100+ cows 4%

Herd structure

2000 2002 2004Herd size

% herd % milk % herd % milk % herd % milk

1-10 68 10 64 7 62 6

11-50 21 14 24 13 25 12

51-100 3 6 4 7 4 6

101-300 5 27 6 28 6 27

301-600 2 22 2 23 2 25

601-900 0,3 9 0,5 10 0,6 10

901-1200 0,1 3 0,1 5 0,2 7

1200- 0,1 8 0,1 8 0,1 7

Milk quota

0

500

1000

1500

2000

2500

3000

Estonia Slovenia Latvia Slovakia Lithuania Hungary CzechRep

production 2002

quota

0

2000

4000

6000

8000

10000

12000

14000

Poland

Purchase of Raw Milk 2004

Division of Raw Milk Markte in 2004 (Dairy Association and Others)

Valio7%

Võru Juust12%

Põlva Piim7%

Tallinna PT15%

Saaremaa5%

E-Piim17%

Rakvere Piim7%

Estmilk Prod.9%

others21%

Quality of Raw Milk 2004

Quality of Raw Milk (% of delivered milk of respective grade)

52%38%

41%58%

41%58% 67% 71% 79% 83% 87% 88%

43%32%

27% 23%17% 14% 12% 10%

3%6%

0%

20%

40%

60%

80%

100%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

grade I

elite orhighergradeelite grade

highergrade

Price of Raw Milk, EEK/kg

Price of Raw Milk (EUR/100 kg)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

1997 1998 1999 2000 2001 2002 2003 2004

Estonia

EU average

Latvia

Finland

Structure of the Dairy Industry

35 enterprises, 41 processing units

19 large capacity units (process more than 2 mn litres of raw milk annually),

13 small capacity units ( less than 2 mn litres), 9 units do not use raw milk

5 co-operatives, they own 7 units

Foreign investment in 5 enterprises; which own 8 units

Production of milk products (th t)

Production of Dairy Products (th t)

0

10

20

30

40

50

60

70

80

90

1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

0

100

200

300

400

500

600

700

ice cream

WMP

SMP

cheese

butter

total

Consumption of milk products (by milk value kg/per capita)

050100150200250300350400450500

1990 2000 2001 2002 2003 2004

Consumption of drinking milk per capita

60

65

70

75

80

85

1996 1997 1999 2001 2002 2003 2004

Consumption of Milk Products (kg per capita)

0123456789

10

sourmilk

joghurt cheese quark sourcream

1996200020032004

Consumption in other countries

Consumption of Milk, Cheese and Butter in Europe in 2002, kg per capita annually

020406080

100120140160180

Irela

nd

Finl

and UK

Sw

eden

Denm

ark

Neth

erla

nds

Fran

ce

Hun

gary

Aust

ria

Ger

man

y

Cze

ch R

ep

Bel

gium

Pol

and

Slov

enia

Est

onia

Gre

ece

Lith

uani

a

0

5

10

15

20

25

30cheese butter milk

milk

butter,

cheese

Trade of dairy products

-300

-250

-200

-150

-100

-50

0

50

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Foreign Trade Balance (mio EUR)

agriculturalproducts

milk and milkproducts

………..cont

By Product Group

skimmed milk pow der

25%

butter and other milk fat

27%

cheese and quark19%

ice cream4%

w hole milk pow der

17%sour milk products

3%

yoghurt3%

other2%

By Destination

Netherlands35%

Germany18%

Lithuania5%

Finland4%

France10%

other countries

14%

Italy3%

Russia3% Belgium

4%

Latvia4%

Promotion

•Increasing trend everywhere - to encourage the production of higer value added special and traditional products (incl. emotional values)

Examples:•“European Cookery” - Dutch project

•program “Estonian Food” (www.eestitoit.ee)

•campaign “Life originates from milk” (75% financed by the state, 25% by the members of Estonian Dairy Associataion)

In scope of campaign

9. 07 Milk Day in Imavere

…cont

billboards, print, commercial etc.

participants:

•Eri Klas, conductor

•Eda Ines Etti, singer

•Gert Koovit, coach

…cont

Brochures about nutritional value and wholesomeness of milk and dairy products

…cont

Workbook for kids

…cont

Conference in October “Life originates from milk”

target group: pediatricians, scientists, officials etc.

Topic - nutritional value of milk