Mexico Milk Cow Numbers and Milk Production per Cow,
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2 TABLE OF CONTENTS 1. Mexico 1.1. Mexico Milk Market Introduction Dairy Market Structure and Supply Chain in Mexico Mexico Cow Milk Market Production and Fluid Milk Consumption by Volume, Mexico Milk Cow Numbers and Milk Production per Cow, 1.2. Mexico Dairy Products Market Introduction Mexico Dairy Products Market Production by Volume, Mexico Dairy Product Market Production by Volume, Butter Cheese Skim Milk Powder Whole Milk Powder Milk Drinks & Fermented Products Cream Condensed Milk Mexico Dairy Product Market Consumption by Volume, Butter Cheese Skim Milk Powder Whole Milk Powder Mexico Dairy Product Market Net Trade by Volume, Butter Cheese Skim Milk Powder Whole Milk Powder 1.3. Trends and Developments in Mexico Milk and Dairy Products Market 1.4. Competitive Landscape 2
3 1.5. Mexico Milk and Dairy Products Market Future Outlook 1.6. Mexico Macro Economic Indicators: Current and Projections Population, GDP, Inflation, Unemployment Rate as a % of Labour Force, Demographic Distribution of Population on the basis of Age, Appendix 2.1. Market Definition 2.2. Abbreviations 2.3. Research Methodology Data Collection Methods Approach 2.4. Disclaimer 3
4 LIST OF FIGURES Figure 1: Popular Supply Chains in Mexico for 3 Dairy Systems Figure 2: Mexico Cow Milk Production and Fluid Milk Consumption along with Manufacturing Use and Exports by Volume in Thousand Tonnes, Figure 3: Mexico Milk Cow Numbers in Thousand Head and Milk Production per Cow in Kilograms, Figure 4: Mexico Total Dairy Products Market Production by Volume in Thousand Tonnes, Figure 5: Mexico Butter Market Production by Volume in Thousand Tonnes, Figure 6: Mexico Cheese Market Production by Volume in Thousand Tonnes, Figure 7: Mexico Skim Milk Powder Market Production by Volume in Thousand Tonnes, Figure 8: Mexico Whole Milk Powder Market Production by Volume in Thousand Tonnes, Figure 9: Mexico Milk Drinks & Fermented Products Market Production by Volume in Thousand Tonnes, Figure 10: Mexico Cream Market Production by Volume in Thousand Tonnes, Figure 11: Mexico Condensed Milk Market Production by Volume in Thousand Tonnes, Figure 12: Mexico Butter Market Consumption by Volume in Thousand Tonnes, Figure 13: Mexico Cheese Market Consumption by Volume in Thousand Tonnes, Figure 14: Mexico Skim Milk Powder Market Consumption by Volume in Thousand Tonnes, Figure 15: Mexico Whole Milk Powder Market Consumption by Volume in Thousand Tonnes, Figure 16: Mexico Butter Market Net Trade by Volume in Thousand Tonnes, Figure 17: Mexico Cheese Market Net Trade by Volume in Thousand Tonnes, Figure 18: Mexico Skim Milk Powder Market Net Trade by Volume in Thousand Tonnes, Figure 19: Mexico Whole Milk Powder Market Net Trade by Volume in Thousand Tonnes, 4
5 Figure 20: Framework of future opportunities and key performance indicators of the Mexican Milk and Dairy products market Figure 21: Mexico Population Trend in Million, Figure 22: Mexico Gross Domestic Product in USD Billion, Figure 23: Mexico Inflation, Average Consumer Prices in Percentage, Figure 24: Mexico Unemployment Rate as a Percentage of Labour Force, 5
6 LIST OF TABLES Table 1: Main Characteristics of Dairy Production Systems of Dairy Farming Systems Table 2: Mexico Cow Milk Production and Fluid Milk Consumption along with Manufacturing Use and Exports by Volume in Thousand Tonnes, Table 3: Mexico Milk Cow Numbers in Thousand Head and Milk Production per Cow in Kilograms, Table 4: New tariffs imposed in Mexico for cheese imported from the US Table 5: Competitive Landscape of Major Dairy Products Companies (Grupo Lala, Sigma Alimentos, Alpura, Liconsa) in Mexico Table 6: Demographic Distribution of Population in Mexico on the basis of Age and Gender, in Million,
7 MEXICO MEXICO MILK MARKET INTRODUCTION Mexico is the 16 th largest producer of cow milk, with the market share of 2% in the total world cow milk production of 587,446 thousand tonnes in The cow milk production in Mexico is little less than that of Netherland, even though Mexico has almost 7 times the population of the Netherland. Mexico is the 10 th largest importer of dairy products in the world and has a small contribution in the exports of the dairy products. MEXICO COW MILK MARKET PRODUCTION AND FLUID MILK CONSUMPTION BY VOLUME, Mexico yielded over 11,000 thousand tonnes of milk in 2009 from 2.3 million cows which indicates around 4,700 kg per cow. This statistic includes dual purpose cows which contributed around 66% of recorded milking cows. These cows, Dobson and Jesse yielded 10% to 30% of the milk. The average milk yield per cow varies from 700 kg per cow for dual purpose cows to 9,000 per cow on the specialized dairy farms. There is also a seasonality factor in the Milk production with 6 months of production above average and 6 months below average. The period of above average production ends with the beginning of winters and with less availability of the forage. Milk production usually inclines from May to October as this is the time of greatest calving. Figure: Mexico Cow Milk Production and Fluid Milk Consumption along with Manufacturing Use and Exports by Volume in Thousand Tonnes, Milk Market Size ('000s Tonnes) 14,000 12,000 10,000 8,000 6,000 4,000 2, Cow Milk Production Fluid Milk Consumption Manufacturing Use 7
8 MEXICO MILK COW NUMBERS AND MILK PRODUCTION PER COW, Mexico has registered a constant increase in the milk cow numbers over time. Historically, the cow numbers has inclined from 2,200 thousand head to 2,334 thousand head in 2009, at a 2 year CAGR of 3.0%. The growth in the cow numbers especially Holstein breed earmarked the increase in the milk production in Mexico. It has been observed that among the dairy cows herd composition, 49% of the cows are for milk production, 41% are for dual-purpose and remaining 10% are for family or subsistence dairy. It is expected that better breeding technology combined with encouragement of dual purpose dairy production system will increase the cow numbers in the future. Figure: Mexico Milk Cow Numbers in Thousand Head and Milk Production per Cow in Kilograms, Milk Cow Number ('000s Head) 2,600 2,500 2,400 2,300 2,200 2,100 2, ,400 5,200 5,000 4,800 4,600 4,400 4,200 4,000 Milk Production per Cow (Kg) Milk Cow Numbers ('000 Head) Milk Production per Cow (Kg) MEXICO DAIRY PRODUCTS MARKET INTRODUCTION MEXICO DAIRY PRODUCTS MARKET PRODUCTION BY VOLUME, Mexico dairy products market has registered consistent growth in the past backed by strong growth in the milk drinks and fermented products and skim milk powder segment. Powdered 8
9 milk, cheese and butter products are the basic ingredients in the Mexican diet and hence become the necessities for the people. Figure: Mexico Total Dairy Products Market Production by Volume in Thousand Tonnes, Dairy Product Market Size ('000s Tonnes) 1,800 1,600 1,400 1,200 1, Total Dairy Products Market Production MEXICO DAIRY PRODUCT MARKET PRODUCTION BY VOLUME, CHEESE Increase in the personal disposable income of the people combined with the availability of more domestic raw milk for processing of cheese has resulted in manifold incline in the production of cheese. The production was witnessed at 225 thousand tonnes, an incline of 53.1% from the 2007 level of 147 thousand tonnes. There are several factors which are expected to influence the production level of 2010 such as consumers continued preference to consume inexpensive cheeses including yellow, panela and fresh cheese. Aged (yellow, chihuahua and manchego) cheese production is projected to recuperate this year. The production of Mexican aged cheese production will be supported by the increase in the consumers disposable income and is backed by the recent addition of penalizing duties imposed on the imports of the US aged cheese. Additionally, incline in the demand within the restaurant sector will result in more production of cheese from commercial cheese processors. 9
10 The cheese production system has been changed and new system has been adopted in Mexico. Some cheese processors have started using whey obtained from fresh cheese production (largely panela, fresh and oaxaca). This offers compelling prospects for cheese producer to realize additional profit with eco-friendly means. Usually whey is dumped and results in an opportunity loss for cheese processors. On average, 10 litres of milk are required to process a kilogram of cheese, hence using whey as a raw material has proved a more cost effective way to attain savings. Figure: Mexico Cheese Market Production by Volume in Thousand Tonnes, Production ('000s Tonnes) Cheese Production MEXICO DAIRY PRODUCT MARKET CONSUMPTION BY VOLUME, WHOLE MILK POWDER Consumers spend a nominal percentage of their annual dairy budget on whole milk powder. About 153 thousand tonnes of whole milk powder was consumed in Mexico in The consumption level though declined in 2008 due to economic turmoil and decrease in the personal disposable income of the people, the demand for whole milk powder increased in 2009 with the initial recovery in the industry. Fluctuating milk prices also played a major role in determining the expenditure on whole milk powder. 10
11 Figure: Mexico Whole Milk Powder Market Consumption by Volume in Thousand Tonnes, Consumption ('000s Tonnes) Whole Milk Powder Consumption MEXICO DAIRY PRODUCT MARKET NET TRADE BY VOLUME, BUTTER Mexico is one of the largest importers of dairy products in Latin America. It largely imports from the US. The butter trade account deficit registered in 2007 was 50 thousand tonnes which inclined in 2008 to 58 thousand tonnes. This was largely due to the increase in the imports of butter because of the economic conditions. In 2009, New Zealand has been the major provider of butterfat to Mexico which accounted for 69% of total imports, followed by the US with 14% and Australia with 10%. It is expected that the increase in the consumption of butter fats and butter oils in the future, will outstrip the growth in the domestic production and result in higher trade account deficit. The net trade account deficit is expected to reach ~ thousand tonnes by
12 Figure: Mexico Butter Market Net Trade by Volume in Thousand Tonnes, Net Trade ('000s Tonnes) Butter COMPETITIVE LANDSCAPE Table: Competitive Landscape of Major Dairy Products Companies (Grupo Lala, Sigma Alimentos, Alpura, Liconsa) in Mexico Major Players Business Overview Major Product Lines and Key Brands (Revenue Contribution) Key Performance Indicator Geographical Reach Source: Company Reports, AM Mindpower Solutions 12
13 MEXICO MILK AND DAIRY PRODUCTS MARKET FUTURE OUTLOOK Figure: Framework of future opportunities and key performance indicators of the Mexican Milk and Dairy products market Role Player Opportunity Plan of Action Future Returns/Effects Suppliers of Semen Credit Providers Feed Manufacturers Equipment Suppliers Dairy Farmers Large Dairy Processors Government and Public Authorities 13
14 APPENDIX MARKET DEFINITION Cow Milk is defined as the raw milk produced by cows in Latin America which are processed in fluid milk and grade B milk for manufacturing use of other dairy products such as Butter, Cheese and others. Dairy products market includes Butter, Cheese, Skim Milk Powder, Milk Drinks and Fermented Products, Condensed Milk, Cream and Whey Powder segments. Milk Drinks and Fermented Products are defined as the dairy products made through microbial fermentation process using lactic acid bacteria such as Buttermilk, Sour cream, Yogurt, Kefir and Koumis. DISCLAIMER No part of this manual or any material appearing may be reproduced, stored in or transmitted on any other Web site without written permission of AM Mindpower Solutions and any payments of a specified fee. Requests to republish any material may be sent to us. 14
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