Global Dairy trends and perspectives for African dairy farming-Dr. Asaah Ndambi
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Global Dairy trends and perspectives for African dairy farming Dr. Asaah Ndambi IFCN Dairy Research Center, Kiel, Germany [email protected] ESADA African Dairy Conference & Exhibition 2014 – Nairobi
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The IFCN is a global dairy network of researchers, companies and other stakeholders who are active in the dairy chain. The IFCN has a Dairy Research Center with 15 dairy researchers coordinating the network process + running dairy research activities. The IFCN is independent from third parties and committed to truth, science and reliability of results.
Transcript of Global Dairy trends and perspectives for African dairy farming-Dr. Asaah Ndambi
Global Dairy trends and perspectives for African dairy
farming
Dr. Asaah NdambiIFCN Dairy Research Center, Kiel, Germany
ESADA African Dairy Conference & Exhibition 2014 – Nairobi
© IFCN 2014 - for internal use only
Outline
1. IFCN concept
2. Global dairy trends
3. Dairy Africa
4. Africa farm economics
5. Sum up
© IFCN 2014 - for internal use only
IFCN - a global dairy research network
The IFCN is a global dairy network of researchers, companies and other stakeholders who are active in the dairy chain.
The IFCN has a Dairy Research Center with 15 dairy researchers coordinating the network process + running dairy research activities.
The IFCN is independent from third parties and committed to truth, science and reliability of results.
IFCN Dairy Research Center
Researchers Companies
IFCN = International Farm Comparison Network
© IFCN 2014 - for internal use only
IFCN mission We create a better understanding of milk production
world wide
USA
BrazilEthiopiaChina
India
Argentina
© IFCN 2014 - for internal use only
Researchers partners f. 100 countries
Status of the IFCN Network in 2014
> 100 Supporting partners
51 Countries analysed in the Farm Comparison
+ 44 Countries participated in the Country PagesFarm Comparison: 51 countries & 61 dairy regions
Country Profile: + 44 countries = 95 countries
© IFCN 2014 - for internal use only
Outline
1. IFCN concept
2. Global dairy trends
3. Dairy Africa
4. Africa farm economics
5. Sum up
© IFCN 2014 - for internal use only
Only 62% of milk reaches processors Status of milk production
Source: IFCN Dairy Report 2012
© IFCN 2014 - for internal use only
Milk production decreased in mill t
Milk production increased in mill t
Milk production grew where demand grew Change in milk production by country 2008-2013
14,00
4,50
0,65
Annual absolute change of milk production volume 2008-2013
EU-28 1.1
1.4
1.2
0.3
-0.4
5.5
1.1
1.9
1.9
-0.3
1.4
increasedecrease
© IFCN 2014 - for internal use only
“I want more and more”It is just a human behaviour
Source photo: http://pepsieliot.files.wordpress.com/2013/10/dziecko-pije-mleko-od-krowy.jpg
World milk demand growth
World Ø milk consumption per capita
World population
Source: IFCN Database 2014
© IFCN 2014 - for internal use only Sources: www.ifcndairy.org
Comment: Exchange rate: 1 EUR = 1.32 US-$, 1 NZ-$ = 0,805 US-$
IFCN‘s world milk price indicator Record high milk price in 2013
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%)
Shares are based on volumes traded on the world market.
© IFCN 2014 - for internal use only
Record high prices… What was the reason ???
Sum of 60 countries representing 92% of world milk production, including estimations.
Source: dollar www.thumbs.dreamstime.com/z/goldm%25C3%25BCnze-dollar-zeichen-clipart-2638170.jpg:, scale: http://www.spectaclepmg.com/wp-content/uploads/2014/03/scales.jpg, Milk:http://2.bp.blogspot.com/_zwI_BlkKQOw/TOQTb4nBUxI/AAAAAAAAAcA/xcHQnBOarhI/s1600/milk
%2Bbottles.jpg
Price & production development
© IFCN 2014 - for internal use only
World milk and feed price IFCN margin over compound feed costs
IFCN world feed price30% soyabean meal,
70% corn
IFCN world milk price
US
-$ p
er
100
kg
Milk and feed price drive milk supply Data Jan. 2007 – June 2014
Source: Data product - Monthly real time data of milk production, milk & feed prices, status 5/2014
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.
% change in milk production 60 countries
© IFCN 2014 - for internal use only
Outline
1. IFCN concept
2. Global dairy trends
3. Dairy Africa
4. Africa farm economics
5. Sum up
© IFCN 2014 - for internal use only
Only 20% of African milk reaches processors Status of milk production 2013
Source: IFCN Dairy Report 2012
Africa
Total milk production (mill. tons) 50
Proportion of milk delivered (%) 20%
Total population (billion) 1.1
Per capita consumption (kg ME/yr) 52
Self sufficiency in milk production 88%
Number of dairy farms (million) 10.9
Number of milk animals (million) 65.4
Average milk yield (kg ECM/cow/yr) 600
© IFCN 2014 - for internal use only
Milk surplus and deficit world-wide 2013
EU-28 13.3
5.5
-6.6
-8.1
2.0
20.62.3
-0.8
55,00
15,00
2,50
surplus in mill tonsdeficit in mill tons
Decrease in milk production in mill. t ECM
Increase in milk production in mill. t ECM
Africa is a net importer But local production is growing strongly
Milk deficit 2013 in mill. t ME
Milk Surplus/deficit 2013
-0.5
-2.1-0.5 -0.7
-0.8 0.28 (6.4%)
Milk surplus 2013 in mill. t ME
Change in milk production 2009 - 2013
0.11 (4.4%)
0.14 (6.0%)
-0.04 (-0.2%)
0.09 (5.1%)
0.05 (1.8%)
0.16 (12.9%)
0.11 (5.2%)
ECM: Energy Corrected Milk (4.0% fat, 3.3% protein)ME: Milk Equivalent
© IFCN 2014 - for internal use only
Higher milk demand than productionSince 2011 deficit is reducing
Source: IMF, IFCN Dairy Research Center
© IFCN 2014 - for internal use only
Outline
1. IFCN concept
2. Global dairy trends
3. Dairy Africa
4. Africa farm economics
5. Sum up
© IFCN 2014 - for internal use only
Number of dairy farms 2012, incl. IFCN est.
3.153,34
1.000,00
150,00
Number of dairy farms world-wide 2012
India77 mill farms
Pakistan7.2 mill farms
EU-271.4 mill
1.09mill
3.15 mill
1.79 mill
Argentina11,900
New Zealand11,800
6,800
12,500
57,700
Means of living for the massesDairy farm numbers in 2012
Sources: Dairy sector database product, IFCN Dairy Research Center
© IFCN 2014 - for internal use only
Dairy farm structure - average farm size 2012
Milk animals per farm 2012cow & buffalo, incl. IFCN est.
<= 10
> 10 <= 30
> 30 <= 50
> 50 <= 100
> 100
no data
Small farms still dominatingAverage farm size in 2012, cows and / or buffalos per farm
160
77
241
393
147
22
2
3
EU-27 16
Ø farm size world: 3 cows
13 countries with Ø farm size >100
Countries with Ø farm size >100: DK, GB, CZ, CY, AR, UY, US, AU, NZ, SA, IL, ZA, TW.
238
Sources: Dairy sector database product, IFCN Dairy Research Center
© IFCN 2014 - for internal use only
The typical farm aproachExamples of typical farms
Germany30, 106
cows/farm
New Zealand350, 1200
Argentina170, 400
cows/farm
China10/40
135/ 340/ 1600 cows/farm
Ethiopia 4, 50
Cameroon2, 35, 50
cows/farm
Algeria6,18
ZA520, 630
cows/farm
USAWI 80, 500
NY 71, 2000West 1000, 3000, 5000
AU300, 750
Typical farm approach
. Farm selection
. Data collection
. Data validation
. Results validation
© IFCN 2014 - for internal use only
Cost of milk production ranges from 0.1 – 1 US-$ / kg
Cost of milk production (2012)US-$ / 100 kg milk (ECM)
60 <= 130
50 <= 60
40 <= 50
30 <= 40
20 <= 30
0 <= 20
0 <= 0
Results for average size dairy farms / country /
region Cost level of farms in region where shade is placed
© IFCN 2014 - for internal use only
Cost Competivenessaverage sized farms per country in 2013
DZ
-6
TN
-4
ET
-3
UG
-3
ZW
-95
ZA
-520
DE
-118
N
NZ
-388
0
10
20
30
40
50
60
70
Quota costs Opportunity costs
Cost P&L - non milk returns Milk price
US
D/1
00 k
g E
CM
DZ-6 TN-4 ET-3 UG-3 ZW-95 ZA-520
DE-118N NZ-388
0
10
20
30
40
50
60
Other returns (f.e. manure, surplus feed) Decoupled direct subsidies
Coupled direct subsidies + VAT surplus Cattle returns
USD/100 kg ECM
46
Cost of Milk Production Only: year 2013 Non-Milk Returns and Subsidies: year 2013
World Milk Price 2013
North East South North East South
© IFCN 2014 - for internal use only
DZ
-6
TN
-4
ET
-3
UG
-3
ZW
-95
ZA
-520
DE
-118
N
NZ
-388
0
200
400
600
800
1000
1200
US
D /
ha
Cost Competivenessaverage sized farms per country in 2013
Level of land rent in 2013
DZ
-6
TN
-4
ET
-3
UG
-3
ZW
-95
ZA
-520
DE
-118
N
NZ
-388
0
5
10
15
20
25
US
D /
ho
ur
Average wages in 2013
North East SouthNorth East South
© IFCN 2014 - for internal use only
Summary
World milk and feed prices strongly drive milk supply 2009: Stronger drive from low milk prices 2013: Stronger drive from high feed prices
Africa has a self sufficiency level of 88% Demand is increasing due to population growth, urbanisation, &
increasing GDP Local production is increasing strongly especially in the last years
Competitive production cost s in Africa lower cost for input factors (land, labour) Less investment costs
Good potential for growth in Africa but you can only improve what you can measure
© IFCN 2014 - for internal use only
Dairy farmer (3 cows) Rice farmer (0,5 ha)
Economic sustainability is visible in the villages The case of Indonesia a value creating farming system
