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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.
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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
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“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
