2006
For a BetterUnderstanding ofMilk ProductionWorld-Wide
Partners of the IFCN Dairy Network
Research Partners: 58 Institutions from 55 Countries
Main Supporting Partners
2006
Institutional Partners
IFCN Supporters
2006
For a BetterUnderstanding ofMilk ProductionWorld-Wide
Partners of the IFCN Dairy Network
Research Partners: 58 Institutions from 55 Countries
Main Supporting Partners
2006
Institutional Partners
IFCN Supporters
Extract
To receive the full Report please contact
torsten.hemm
2
Elgin Giffhorn Lola Izquierdo
Katja SeifertEberhard Bönemann
The IFCN Dairy Research Center
The IFCN Dairy Research Center, since 1st of October 2006 located in Kiel, Germany is co-ordinating and organising the activities of the network. All members have a degree in agricultural sciences. They use the IFCN infrastructure for their research projects in dairy economics (Master, PhD, post doctoral research) or support the network activities (full time / part time employments).
IFCN Dairy Report 2006
Participants of the 7th IFCN Dairy Conference 2006
Torsten Hemme Eva Deeken Karin Wesseling Otto Garcia
Khalid Mahmood
Organisational details
Editors IFCN Dairy Report 2006 Hemme T, IFCN Dairy Team and all IFCN researchers. For references of the IFCN Dairy Report use: Hemme et al. (2006): IFCN Dairy Report 2006, International Farm Comparison Network, IFCN Dairy Research Center, Kiel, Germany
ContactTorsten Hemme, e-mail: [email protected], homepage: www.ifcndairy.org
Ordering the Dairy Report 2006 As we believe in win-win based co-operations the report is available via longer term partnership with the IFCN Dairy. Please contact us for details.
For organisations that would receive the report without becoming a network partner we charge a fee (50 % of a country membership fee) to maintain the research infrastructure. For educational institutions (universities, etc.) and organisations from developing countries, special arrangements are foreseen. Please ask for details.
© IFCN Dairy Report 2006
Main supporting partners of the IFCN Dairy Network
Juliane Stoll
Alex Blarr
Anne Pasmann Mikhail RamanovichAsaah Ndambi
55 partners from 31 countries – conference program see Annex 1
© IFCN Dairy Report 2006 1
IFCN Dairy Report 2006
1. Cost comparison: This year we have reduced the variables being published to have more space for the country pages.
2. Milk prices: In this chapter we have increased the number of countries analysed to 60. We also added a chapter about feed prices and the milk feed price ratio.
3. Dairy sector & chain profi le: This profi le, produced for 60 countries, gives a comparable overview of:
Consumer prices and margins in the chain. Tariffs and the world market price for milk. Milk pricing and milk quality systems. Seasonality of milk production and pricing. Milk processing and consumption pattern. Dairy trade and self suffi ciency in milk.
4. Special studies: These summarise a wide number of IFCN studies and focus as well on method improvements.
A Word of Thanks
I would like to extend my heartiest thanks to all our scientifi c partners, main supporting partners (DeLaval, Fonterra, Pfi zer), our supporters and also the people working in the IFCN Dairy Research Center. Your support was the driver for keeping the network alive especially during the organisational transition period 2005/06. It was a pleasure to serve the network in 2006 and I am looking forward to our activities in 2007.
Torsten Hemme, Head of the IFCN Dairy Network
IFCN Dairy Report 2006 – Letter of the Editor
Dear friends,
It is a pleasure for me to summarise the highlights of our research and network activities in 2006.
The Mission as a Guide
Our mission »Create a better understanding of milk production« has proven to be a good guide for excellent dairy economic research results and also the very enjoyable intercultural working atmosphere.
Status of the Network in 2006
60 countries, representing 91 % of world milk production have been analysed with their dairy sector and chain profi le. 101 typical farms from 34 countries participated in the farm comparison. New countries are Belarus, Bulgaria and Cameroon.
News and Highlights 2006
IFCN Dairy Conference 2006: The conference held in Poland was a big success. 90% of the activities were rated by the participants as good or very good. P. Jachnik, ATLA and J. Otte, FAO contributed as invited speakers.
IFCN World Dairy Map: The fi rst map of this type was launched during the 2006 Dairy conference. It summarises the main fi ndings of the Dairy Report 2005.
CAU – University Kiel: In 2006 we signed a private public partnership with the CAU and its new »Master of Dairy Science« program. Due to the new relation, the IFCN Dairy Research Center moved to Kiel.
IFCN Support Association e.V.: We have founded a non-profi t organisation. It is able to collect donations and support students/researchers who work within the IFCN Network.
Method issues: In 2006 we have focused on a number of method challenges like: Decoupling of direct payments, alternative ways to calculate opportunity cost, new ways of cost item analysis and the milk supply curve.
Analytical highlight: In 2006 for the fi rst time a study on benchmarking 45 different dairy development programs for a 3 cow farm in India, Andhra Pradesh was completed. This was a big step forward to help policy makers to identify the most promising policies for dairy development.
2 © IFCN Dairy Report 2006
Timo Sipiläinen, Sami Ovaska, Matti Ryhänen
Agrifood Research Finland, MTT Economic Research, Helsinki, FinlandSeinäjoki University of Applied Sciences, School of Agriculture and Forestry, Ilmajoki, Finland
Ola Flaten, Bjørn Gunnar Hansen NILF – Norwegian Agricultural Economics Research Institute; TINE, Norwegian Dairies, Oslo, Norway
Eastern Europe, Middle East and Africa
Michal Switlyk, Malgorzata Karolewska, Ewa Koloszycz
University of Szczecin, Institute of Management, Szczecin, Poland
Iveta Bosková
Vuze – Research Institute of Agricultural Economics, Prague, Czech Republic
Csaba Borbély
University of Kaposvár, Faculty of Economic Science, Kaposvár, Hungary
Zlatan D. Vassilev
PhD student University Hohenheim, Germany; Bulgaria
Olga M. Karasyk, Olena Bidna
National Agricultural University of Ukraine, Kyiv, IFC, Kyiv, Ukraine
Mikhail Ramanovich
PhD Student at IFCN Dairy Research Center, Belarus
Liron Tamir Israel Dairy Board, Rishon-Le‘Zion, Israel
Asaah Ndambi
PhD Student at IFCN Dairy Research Center, Cameroon
Western Europe
Christian Gazzarin
Agroscope Reckenholz-Tänikon Research Station (ART), Agricultural Economics, Tänikon, Switzerland
Leopold Kirner
Federal Institute of Agricultural Economics, Vienna, Austria
Alex Blarr, Eberhard Bönemann
IFCN Dairy Research Center,Kiel, Germany
Michel de Haan
Animal Sciences Group, Wageningen-UR, Lelystad, The Netherlands
Gérard Conter
Ministère de l’Agriculture, Service d’Economie Rurale, Luxembourg
Jean-Luc Reuillon
Institut de l’Èlevage, Département Actions Régionales, Aubière, France
Ernesto Reyes
Animal Health and Livestock Services, TRAGSEGA, Madrid, Spain
Alberto Menghi
CRPA – Centro Ricerche Produzioni Animali, Reggio Emilia, Italy
Colm O’Reilly
Milk Development Council, Cirencester, United Kingdom
Fiona Thorne
Rural Economy Research Centre, Teagasc, Dublin, Ireland
Martin Wegge, Ole Kristensen
The Danish Agricultural Advisory Centre, National Center, Aarhus, Denmark
Carolina Nilsson Swedish Dairy Association, Stockholm, Sweden
Participating Dairy Economists / Co-editors of the Dairy Report
For references of the Dairy Report use: Hemme et al. (2006): IFCN Dairy Report 2006, International Farm Comparison Network, IFCN Dairy Research Center, Kiel, Germany. For references in the special studies or the country reports use f.e.: Gazzarin C (2006): Switzerland – Dairy sector & chain profi le. In: Hemme et al. (2006): IFCN Dairy Report 2006, International Farm Comparison Network, IFCN Dairy Research Center, Kiel, p 68.
Dairy Research Center
Dairy Research Center
Dairy Research Center
58 research institutions from 55 countries
© IFCN Dairy Report 2006 3
Asia
CL Dadhich, TN Datta, AK Saha
National Dairy Development Board, Anand, India
Khalid Mahmood
Agriculture Policy Studies Institute, Lahore, Pakistan
A. R. Khan
Bangladesh Agricultural University Mymensingh, Bangladesh
Sam Chi Dairy ConsultantBeijing, China-North
Oceania
John McKenzie
Dairy Australia, Melbourne, Victoria, Australia
Andrew Weinert, Ian Bell
Department of Agriculture, Perth, Western Australia
Nicola Shadbolt College of Sciences, Massey University, Palmerston North, New Zealand
North and South America
Mathieu Frigon
Dairy Farmers of Canada, Ottawa, Canada
Ed Jesse
Babcock Institute for International Dairy Research and Development, University of Wisconsin-Madison, USA
James Richardson
Texas A&M University, Agricultural Food Policy Centre, Department of Agricultural Economics, College Station, Texas, USA
Bernardo Ostrowski
Universidad Buenos Aires (UBA), Cátedra de Administración Rural, Facultad de Agronomia, Buenos Aires, Argentina
Lorildo Aldo Stock
Embrapa Gado de Leite (Embrapa Dairy Cattle), Juiz de Fora, Minas Gerais, Brazil
Leandro A. Ponchio
Centro de Estudos Avançados em Economia Aplicada (CEPEA), Sao Paulo, Brazil
Carlos Lizana
Cooprinsem, Osorno, Chile
Carlos A. Gomez
Universidad Nacional Agraria La Molina, Lima, Peru
Participating Dairy Economists/ Co-editors of the Dairy Report
Research participants only in the country pages
Margita Stefanikova Slovensky zvaz prvovyrobcov mlieka, Nitra, Slovakia
Aleksejs NipersLatvian State Institute of Agrarian Economics, Riga, Latvia
Ben MoljkKmetijski inštitut Slovenije, Ljubljana, Slovenia
Anatoli TakunCentre of Agricultural Economics, Minsk, Belarus
Ilir Kapaj UBT University, Tirane, Albania
Michel Nordmann Farmer in Transylvania, Romania
Kirill ZhichkinSamara State Agricultural Academy, Samara Region, Russian Federation
Evelina BudjurovaUniversity Giessen (Germany), Uzbekistan
David Balikowa Dairy Development Authority, Kampala, Uganda
Henri BayemiInstitute of Agricultural Research for development (IRAD), Bambui, Cameroon
Mutasim Mekki Upper Nile University, Khartoum, Sudan
Aminu Shittu Usmanu Danfodiyo University, Sokoto, Nigeria
Koos Coetzee Milk Producers’ Organisation, Pretoria, South Africa
Jaime Jurado Arredondo Universidad Autonoma de Chihuahua, Mexico
Jorge Alvarez University Montevideo, Uruguay
Theingi MyintAgricultural University Yezin, Myanmar
Jarunluk YounggadChiang Mai University, Thailand
Hoang Thi Huong TraNational Institute of Animal Husbandry, Hanoi, Vietnam
Naomi K. Torreta National Dairy Authority, Diliman, Quezon city, Philippines
Isti Subechan Soedirman University, Purwokerto, Central Java, Indonesia
Kyung-Ryang Kim, Seon ShiKangwon National University, Chuncheon, Republic of Korea
Nobuhiro SuzukiKyushu University, Japan
4 © IFCN Dairy Report 2006
Table of Contents
Main supporting partners of the IFCN Dairy Network
Preface
IFCN Dairy Report – Developments 2000 - 2006 6
Regional Maps and the Typical Farms 7
Questions and Answers about IFCN Dairy 8
1 Comparison of the typical farms 2005 in US-$
1.1 Summary – Farm Comparison 2005 in US-$ 14
1.2 Milk Supply Curves 2005 16
1.3 Description of the Dairy Enterprise 18
1.4 Costs of Milk Production only and Milk Price 20
1.5 Total Costs and Returns of the Dairy Enterprise 22
1.6 Returns: Milk Price and Cattle Returns 24
1.7 Returns: Direct Payments and Policy 26
1.8 Profi ts and Returns to Labour 28
1.9 Asset Structure and Return on Investment 30
2 Developments in milk prices 1996 - 2005
2.1 Milk Prices in 2005 in US-$ and Developments 36
2.2 Milk Price Developments during 1996 - 2005 in US-$ 38
2.3 Milk Price & Currency Developments 1996 - 2005 40
2.4 Feed Price and Milk / Feed Price Ratio Comparison 42
3 Country Reports – Dairy sector & chain profi le
3.1 Status and Deveplopment of Milk Production 48
3.2 Seasonality of Milk Production and Milk Prices 50
3.3 World Dairy Sector Fact Sheet 1990 - 2004 52
3.4 Milk Surplus and Defi cit 2004 in t ME and US-$ 54
3.5 Tariffs Analysis for the Dairy Sector 56
3.6 World Milk Consumption per Capita 2004 and Changes in the Last 5 years 58
3.7 Comparing Consumer Prices for Milk and Farmers’ Share of It 60
3.8 Margin in the Dairy Chain: Processing, Retailing and VAT 62
3.9 Dairy Products in Different Countries 64
3.10 Method Explanation of the Country Page 2006 66
Dairy sector & chain profi le
3.11 Norway 67
3.12 Switzerland 68
3.13 Austria 69
3.14 Germany 70
3.15 The Netherlands 71
3.16 Luxembourg 72
3.17 France 73
3.18 Spain 74
3.19 Italy 75
3.20 United Kingdom 76
3.21 Ireland 77
3.22 Denmark 78
3.23 Sweden 79
3.24 Finland 80
3.25 Poland 82
3.26 Hungary 83
3.27 Czech Republic 84
3.28 Slovakia 85
3.29 Latvia 86
3.30 Lithuania 87
3.31 Estonia 87
3.32 Slovenia 88
3.33 Albania 89
3.34 Bulgaria 90
3.35 Romania 91
3.36 Ukraine 93
3.37 Russian Federation 94
3.38 Belarus 95
3.39 Uzbekistan 96
3.40 Kazakhstan 97
3.41 Israel 98
3.42 Turkey 99
3.43 Iran 99
3.44 Kenya 100
3.45 Uganda 101
3.46 Cameroon 102
3.47 Sudan 103
3.48 Nigeria 103
3.49 South Africa 105
3.50 Canada 106
3.51 USA 107
3.52 Mexico 108
3.53 Peru 109
3.54 Brazil 110
3.55 Uruguay 111
3.56 Chile 112
3.57 Argentina 113
3.58 India 114
3.59 Pakistan 115
3.60 Bangladesh 116
3.61 Myanmar 117
3.62 Thailand 118
3.63 Vietnam 118
3.64 Philippines 119
3.65 Indonesia 120
3.66 China 121
3.67 Republic of Korea 122
3.68 Japan 123
3.69 Australia 124
3.70 New Zealand 125
A milk processing plant
A buffalo in India
© IFCN Dairy Report 2006 5
Table of Contents
4 Special Studies
Additional farm comparisons and analysis
4.1 Comparison of Milk Production in Different World Regions 130
4.2 Comparison of Five Dairy Production Systems 132
4.3 Time Series Analysis of a German and a New Zealand Farm 1996 - 2005 134
4.4 Dairy Production in Four Italian Districts 136
4.5 Recent Trends in African Milk Production Systems 138
4.6 Comparison of an Individual Farm with Farms of the IFCN Database 140
Policy analysis, forecasting work
4.7 Competitiveness of Dairy Farms in Alpine Regions 144
4.8 IFCN Dairy Forecast – Germany 1996 - 2010 146
4.9 Farm Structure in Bulgaria – Perspectives in the EU 148
4.10 Benchmarking 45 Dairy Development Activities in Andhra Pradesh, IN 150
4.11 Development of Milk Regions in Germany – A Processors View 154
Dairy sector and dairy chain analysis
4.12 Analysis of the Peruvian Feed Chain: The Case of Cajamarca 156
4.13 Analysis of Milk Price Development and Dairy Tariffs for 2004 158
4.14 Analysis of the Dairy Chain in Six Countries 160
4.15 Method Approach – Individual Farm Data vs Typical Farm Data 162
Methods improvements
4.16 A Method for Activity Based Cost Analysis in Dairy Farms 164
4.17 Concept of IFCN Cost Analysis after Decoupling of Direct Payments 166
4.18 Method Development: Opportunity Costs & Milk Yield 168
4.19 IFCN Research Approach to Guide Dairy Development Activities 170
4.20 Consideration of Farm Risk and Uncertainty in Dairy Development 172
Annex
A.1 7th IFCN Dairy Conference 2006 – Szczecin, Poland 178
A.2 Program: 3rd IFCN Dairy Supporter Conference 2005 180
A.3 IFCN Dairy and Participation in Conferences 2005 181
A.4 IFCN Dairy and Participation in Conferences 182
A.5 The IFCN Dairy Team in 2006 (Status July 2006) 184
A.6 IFCN World Dairy Map 185
A.7 IFCN Dairy Publications 186
A.8 Description of Data Collection for Typical Dairy Farms 188
A.9 Description of the Typical Dairy Farms Analysed 189
A.10 Exchange Rates 1996 - 2005 194
A.11 Abbreviations 195
A.12 Assumptions for the Calculations – Farm Economic Indicators 196
A.13 Specifi cation of World Regions 197
A.14 Who is Who 198
Serving the costumer
Harvesting cornsilage
6 © IFCN Dairy Report 2006
2000 2001 2002 2003 2004 2005 2006
Countries analysed in
the farm comparison 8 20 24 27 31 33 34
No. of farm types* 21 52 72 76 92 102 103
Special topic Ex-post Country Dairy Farm Dairy Milk Dairy
analysis reports production structure sector production sector &chain
1996 - 2000 on milk systems analysis profi le fact sheet profi le
production survey 1990 - 2001 1981 - 2001 1996 - 2003 1990 - 2004
IFCN Dairy Conference Sept. 2000 June 2001 May 2002 May 2003 June 2004 May 2005 May 2006
* Farms analysed in Chapter 1 and 4.
IFCN Dairy Report – Developments 2000 - 2006
Which countries are participating in the farm comparison in 2006?
Main supporting partners of the IFCN Dairy Network
Countries / regions last year
New countries / regions / farms
Contacts to dairy economists
Dairy animals in
United Kingdom Cameroon India New Zealand
© IFCN Dairy Report 2006 7
Texas2,400
Wisconsin80
350
Canada5798
California1,710
Peru6
15
Argentina170
1,700
Chile45
351647
Brazil
45 MG80 MG
90 PR54 RS
62 GO
Regional Maps and the Typical Farms
Legend: Numbers indicate the number of cows in the typical farms.LL = Land less. ++ = Farms better managed than average. GO = Goias, MG = Minas Gerais, RG = Rio Grande do Sul, PR = Parana.
South America
North America
Pakistan 1, 3, 10
New Zealand282546
1,042
AustraliaWestern
239247620
Australia Victoria
210225925
India
Maharashtra2 LL2
Karnataka124
510
China - Hebei40
400
1, 5, 9Punjab
West Bengal24
Bang-ladesh
210
Jinghai County, Tianjing
9
China - Shanxi
Asia and Oceania
Europe
Sweden50
195 Finland2444Norway
1931
60
Switzer-land
Austria122540
---
2060
Spain
3760
103
France3170
Luxembourg3670
Germany30, 55, 80,85, 120, 650
Denmark100180
NL5595UK
20699
Ireland5187
Czech Republic67, 428, 535
Hungary100400
Poland12, 20, 60
Hungary100400
Poland12, 20, 60
Hungary100400
Poland12, 20, 60Poland12, 20, 60
Italy116229
Israel63
270
Ukraine2, 2 ++, 500
Belarus650650 ++
Belarus650650 ++
Belarus650650 ++
Bulgaria2
22
Bulgaria2
22
Cameroon1
30
Africa
8 © IFCN Dairy Report 2006
What is IFCN?
IFCN stands for International Farm Comparison Network. The IFCN is a world-wide association that is linking agricultural researchers, advisors and farmers.
What is the mission of IFCN Dairy?
To create a better understanding of milk production world-wide.
Why is the IFCN Dairy Network needed?
Milk production world-wide is characterised by three key issues which will lead to rapid changes in the future:
Very diverse farming systems. High dependency on politics (trade policy, quotas,
direct payments, etc.). Scope for substantial changes in the policy.
The global know-how provided by the network becomes an important »production factor« for successful business decisions for farmers and the related agribusiness companies. Moreover policy discussions (WTO, agricultural subsidies, etc.) can become more fact-based which makes solutions easier to fi nd.
What are the annual activities?
Create a harmonised database of typical farms. Analyse the farms using the IFCN method. Validate the results during the Dairy Conference. Publish the results in the Dairy Report. Improve the IFCN methods continuously. Exchange ideas on current dairy issues and research
projects.
What are the values of the IFCN?
IFCN is an open scientifi c system for the exchange of ideas and the creation of knowledge and information. IFCN is independent from third parties (policy makers, lobby groups, industry) and committed to truth, science and reliable results.
What are the priorities?
I. Sustainability of the network infrastructureII. Reliability of data and quality of the resultsIII. Inclusion of more countries and farmsIV. In-depth analysis (cost components, etc.)V. Special studies (policy analysis, etc.)
How is the IFCN Dairy organised?
IFCN Dairy is a scientifi c network. The IFCN Dairy Research Center coordinates the scientifi c work. Moreover it provides a professional management for the network.
How are the IFCN Dairy activities funded?
The network co-ordination is mainly funded by the consortium fee from the participating countries, partnerships with agribusiness companies and global agriculture-related institutions. All partners have agreed on the vision, priorities and values of the IFCN.
Questions and Answers about IFCN Dairy
Main supporting partners of the IFCN Dairy Network
7th IFCN Dairy Conference 2006
Intensive discussions based on facts
© IFCN Dairy Report 2006 9
Dairy economists – Benefi ts from a partnership with IFCN
Benchmarking: Analyse your dairy region in a global context.
Networking: Link yourself to the leading network of experts in your research topic.
Access to data: Send in 2 farm types and get the world in return.
Promotion: Promote your institution nationally and internationally.
To join the IFCN Network you provide typical farm data from your country and in return will receive the annual IFCN Dairy Report comparing your farms with the rest of the world. If you prefer more intensive co-operation you have the opportunity to participate in the annual IFCN Dairy Conference, take model training, receive the models, the result-database and the input data of the typical farms used in the network. Moreover you are welcome to take part in international projects as well as in discussions on the future orientation of the network. In return your country becomes a member of the IFCN Consortium and provides the consortium fee.
Institutional partners
The IFCN Dairy Network has institutional partnerships with:
CAU – Christian-Albrechts- University, Kiel
IDF – International Dairy Federation FAO – Pro Poor Livestock Policy Initiative
Main supporting partners
The IFCN offers the main supporter status exclusively to one company per branch.
Milking equipment
Milk processing
Animal health
other branches in discussion
IFCN supporters
The IFCN offers the IFCN supporter status to interested agribusiness companies, being active around the dairy farm.
How to become a partner of IFCN Dairy?
The IFCN Dairy Team will provide you with any further information that you require ([email protected]).
Questions and Answers about IFCN Dairy
Intensive workshops
© IFCN Dairy Report 2006 13
1 Comparison of the typical farms 2005 in US-$
1.1 Summary – Farm Comparison 2005 in US-$ 14
1.2 Milk Supply Curves 2005 16
1.3 Description of the Dairy Enterprise 18
1.4 Costs of Milk Production only and Milk Price 20
1.5 Total Costs and Returns of the Dairy Enterprise 22
1.6 Returns: Milk Price and Cattle Returns 24
1.7 Returns: Direct Payments and Policy 26
1.8 Profi ts and Returns to Labour 28
1.9 Asset Structure and Return on Investment 30
This page and the previous pages: Milk production in Poland (Photos: Katja Seifert, Torsten Hemme)
© IFCN Dairy Report 2006 35
2 Developments in milk prices 1996 - 2005
2.1 Milk Prices in 2005 in US-$ and Developments 36
2.2 Milk Price Developments during 1996 - 2005 in US-$ 38
2.3 Milk Price & Currency Developments 1996 - 2005 40
2.4 Feed Price and Milk / Feed Price Ratio Comparison 42
Boat tour on the Odra river
2 Developments in Milk Prices 1996 - 2005
The plenary sessions
© IFCN Dairy Report 2006 47
3 Country Reports – Dairy sector & chain profi le
3.1 Status and Deveplopment of Milk Production 48
3.2 Seasonality of Milk Production and Milk Prices 50
3.3 World Dairy Sector Fact Sheet 1990 - 2004 52
3.4 Milk Surplus and Defi cit 2004 in t ME and US-$ 54
3.5 Tariffs Analysis for the Dairy Sector 56
3.6 World Milk Consumption per Capita 2004 and Changes in the Last 5 years 58
3.7 Comparing Consumer Prices for Milk and Farmers’ Share of It 60
3.8 Margin in the Dairy Chain: Processing, Retailing and VAT 62
3.9 Dairy Products in Different Countries 64
3.10 Method Explanation of the Country Page 2006 66
Dairy sector & chain profi le
3.11 Norway 67
3.12 Switzerland 68
3.13 Austria 69
3.14 Germany 70
3.15 The Netherlands 71
3.16 Luxembourg 72
3.17 France 73
3.18 Spain 74
3.19 Italy 75
3.20 United Kingdom 76
3.21 Ireland 77
3.22 Denmark 78
3.23 Sweden 79
3.24 Finland 80
3.25 Poland 82
3.26 Hungary 83
3.27 Czech Republic 84
3.28 Slovakia 85
3.29 Latvia 86
3.30 Lithuania 87
3.31 Estonia 87
3.32 Slovenia 88
3.33 Albania 89
3.34 Bulgaria 90
3.35 Romania 91
3.36 Ukraine 93
3.37 Russian Federation 94
3.38 Belarus 95
3.39 Uzbekistan 96
3.40 Kazakhstan 97
3.41 Israel 98
3.42 Turkey 99
3.43 Iran 99
3.44 Kenya 100
3.45 Uganda 101
3.46 Cameroon 102
3.47 Sudan 103
3.48 Nigeria 103
3.49 South Africa 105
3.50 Canada 106
3.51 USA 107
3.52 Mexico 108
3.53 Peru 109
3.54 Brazil 110
3.55 Uruguay 111
3.56 Chile 112
3.57 Argentina 113
3.58 India 114
3.59 Pakistan 115
3.60 Bangladesh 116
3.61 Myanmar 117
3.62 Thailand 118
3.63 Vietnam 118
3.64 Philippines 119
3.65 Indonesia 120
3.66 China 121
3.67 Republic of Korea 122
3.68 Japan 123
3.69 Australia 124
3.70 New Zealand 125
Milk production in Pakistan (Photos: Khalid Mahmood)Previous pages: Milk production in Cameroon (Photos: Marianne Kurzweil)
© IFCN Dairy Report 200678
Milk pricing and quality
Production vs consum Export / Import profi lein Mill tons ME
Processing profi le in % of milk produced
Consumption pattern in kg ME / capita / year
Status and key developments
Milk prices and tariffs The chain for liquid milk
Trade ratios
Seasonality profi le 2004
Self-suffi ciency in milkExports / nat. productionImports / nat. consumption
in Mill tons ME
Surplus / deficit
Milk productionDemand Imports
Exports
year average = 100
Milk price monthlyMilk production monthly
50
60
70
80
90
100
110
120
130
140
150
Milk price monthlyMilk production monthly
Dec
NovOct
Sep
Au
gJu
lJu
nM
ayA
pr
Mar
Feb
Jan
0
100
200
300
400
500
600
700
800
Consumer price
VATMargin (Processor, retailer)»Farmers' milk price« (ECM)
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
50
100
150
200
250
300
350
400
World market price + 2004 tariffs
World market price (SMP/butter)Milk price in the country
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
100
200
300
400
500
600
700
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
1
2
3
4
5
6
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
3.22 Denmark – Dairy Sector & Chain Profi le
Mar
tin
Weg
ge,
Ole
Kri
sten
sen
in DKK / 100 kg milk (ECM) in DKK / 100 kg milk
Status 2004
- Tariffs: Butter 116 %, SMP 72 %
- Share of farmers‘ price on consumer price: 32 %
- VAT on consumer price: 25 %
- Milk consumption: 595 kg ME per capita / year
- Self-suffi ciency in milk production: 149 %
Key developments 1990 - 2004 - Milk production: -0.38 % per year
- Milk consumption per capita: -0.05 % per year
- Population: +0.32 % per year
- Self-suffi ciency: Decreased by -14.2 % points
ExplanationsMethod: See Chapter 3.1 - 3.10 for details. * Residual: Fresh milk products. Consumer product: DKK / 1 litre (fat: 3.5 gram and protein: 3.5 gram)Sources: International statistics (FAO, ZMP, USDA, EUROSTAT, FAPRI, IDF, EU Commission, OECD, AMAD, MAD, UNSTAD-TRAINS) and national statistics.Comments: ZMP data for milk production / delivered. The method of the chosen ME overestimates the milk processing category residual and the per capitaconsumption (category residual). Reason: Exports of dairy products in non-specifi ed products like dairy based baby food, special ingredients and convenience food.
1990 1992 1994 1996 1998 2000 2001 2002 2003 2004
163 % 170 % 177 % 165 % 161 % 152 % 151 % 141 % 153 % 149 % 45 % 48 % 50 % 47 % 47 % 47 % 45 % 45 % 48 % 52 % 9 % 12 % 13 % 14 % 14 % 18 % 17 % 21 % 21 % 28 %
Milk pricing of a »typical« processor
Base: 4.2 % fat, 3.4 % protein, per kgValue ration protein / fat: 1 / 7Fat value: + / - 0.194 DKK / unitProtein value: + / - 0.3271 DKK / unit
The principle of pricing is as follows:Milk price ex. farm = Aconto price - year end bonusAconto price = Raw material value + added value + / - quality payments / deductions - fi xed cost / memberRaw material value = Fat value + protein value‚- volume based costs
Added value: Value from processingFixed cost: 300 DKK / 2 weeks for administration, etc.Volume based costs: 12 DKK / 100 kg for transport, storage
at dairy plant, homogenisation and heat treatment.
Milk quality standards
Maximum level (target level)- Bacterial cell count: < 50,000 cells / ml- Somatic cell count: < 400,000 cells / ml- Antibiotics: Not allowed
Penalties- Bact. / som. cell count: Up to -10 % reduction and if three successive times -20 % (4 times: -30 %)- Antibiotics: First time value of 2 day‘s deliveries will be deducted and penalty of 3,000 DKK; this will double each time of observation within 12 successive months.
Quality bonus: Up to 2 % of raw material value if milk
quality is better than target level.
Residual*Condensed milkDry productsButterCheese
Production - milk deliveredResidual*Condensed milk
Dry productsButterCheese
Production - milk delivered
© IFCN Dairy Report 2006 129
4
Special Studies
4 Special Studies
Additional farm comparisons and analysis
4.1 Comparison of Milk Production in Different World Regions 130
4.2 Comparison of Five Dairy Production Systems 132
4.3 Time Series Analysis of a German and a New Zealand Farm 1996 - 2005 134
4.4 Dairy Production in Four Italian Districts 136
4.5 Recent Trends in African Milk Production Systems 138
4.6 Comparison of an Individual Farm with Farms of the IFCN Database 140
Policy analysis, forecasting work
4.7 Competitiveness of Dairy Farms in Alpine Regions 144
4.8 IFCN Dairy Forecast – Germany 1996 - 2010 146
4.9 Farm Structure in Bulgaria – Perspectives in the EU 148
4.10 Benchmarking 45 Dairy Development Activities in Andhra Pradesh, IN 150
4.11 Development of Milk Regions in Germany – A Processors View 154
Dairy sector and dairy chain analysis
4.12 Analysis of the Peruvian Feed Chain: The Case of Cajamarca 156
4.13 Analysis of Milk Price Development and Dairy Tariffs for 2004 158
4.14 Analysis of the Dairy Chain in Six Countries 160
4.15 Method Approach – Individual Farm Data vs Typical Farm Data 162
Methods improvements
4.16 A Method for Activity Based Cost Analysis in Dairy Farms 164
4.17 Concept of IFCN Cost Analysis after Decoupling of Direct Payments 166
4.18 Method Development: Opportunity Costs & Milk Yield 168
4.19 IFCN Research Approach to Guide Dairy Development Activities 170
Milk production in Western Australia (Photos: Torsten Hemme)Previous pages: Milk production in Denmark (Photos: Torsten Hemme)
Annex
A.1 7th IFCN Dairy Conference 2006 – Szczecin, Poland 178
A.2 Program: 3rd IFCN Dairy Supporter Conference 2005 180
A.3 IFCN Dairy and Participation in Conferences 2005 181
A.4 IFCN Dairy and Participation in Conferences 182
A.5 The IFCN Dairy Team in 2006 (Status July 2006) 184
A.6 IFCN World Dairy Map 185
A.7 IFCN Dairy Publications 186
A.8 Description of Data Collection for Typical Dairy Farms 188
A.9 Description of the Typical Dairy Farms Analysed 189
A.10 Exchange Rates 1996 - 2005 194
A.11 Abbreviations 195
A.12 Assumptions for the Calculations – Farm Economic Indicators 196
A.13 Specifi cation of World Regions 197
A.14 Who is Who 198
Photos: IFCN in action: India, Brazil, Peru, Germany.Previous pages: IFCN being active in Brazil, India, Ukraine and data work in Germany. (Photos: IFCN researchers)
2006
For a BetterUnderstanding ofMilk ProductionWorld-Wide
Partners of the IFCN Dairy Network
Research Partners: 58 Institutions from 55 Countries
Main Supporting Partners
2006
Institutional Partners
IFCN Supporters