World Dairy Situation IDF SC DPE, Paris April 11,
Current dairy situation Dairy production progressed in 2012 in supplying regions but is now stabilizing, even declining in some countries Export demand remained strong Market prices have been rebounding since mid-2012 Major problem for farmers is high production costs 2
World dairy production (all categories included) Geographic breakdown of world milk production in 2012 (millions of tonnes) N. America 99 13% United States 90 Canada 8 Europe 219 29% EU-27 159 Russia 32 Ukraine 11 Belarus 7 Central America 17 2% Mexico 11 S. America 71 9% Brazil 33 Argentina 12 Colombia 8 Africa 39 5% Soudan 8 Egypte 6 Kenya 4 World total: 760 million tonnes Asia 282 37% India 132 China 45 Pakistan 33 Turkey 17 Oceania 29 4% New Zealand 20 Australia 9 FAO Food Outlook November 2012, IDF-DCANZ for NZ
Asia still biggest provider of milk output increase Evolution of dairy production (all categories included) 2007 to 2012 North & Central America + 6 Mt Europe + 6 Mt Asia + 44 Mt South America + 15 Mt Africa + 8 Mt Oceania + 4 Mt CNIEL / IDF, FAO Food Outlook World total: + 84 million tonnes Mt: million tonnes 4
Growth dynamics across the world Annual growth rate of milk production between 2007 and 2012 (%) Canada +0.2% Russia -0.1% USA +1.4% EU +0.9% China + 2.6% Japan -1.0% Mexico -1.5% World average + 2.4% Brazil + 3.9% Argentina +4.1% < 0% 0 to 2% 2 to 4% > 4% India +4.2% Australia -0.2% New Zealand +4.5% CNIEL / FAO Food Outlook 5
Growth dynamics in main dairy producing countries (1/2) Million tonnes USA Million tonnes EU 25, 27 100 + 1.7% / year 160 + 0.9% / year 90 80 80,3 82,5 84,2 86,2 85,9 87,5 89,0 90,2 150-0.6% 147 146 152 154 153 155 158 159 70 05 06 07 08 09 10 11(e) 12(p) 140 05 06 07 08 09 10 11(e) 12(p) Million tonnes Pakistan Million tonnes New Zealand 40 + 1.3% / year - 4.3% / year 22 + 4.9% / year 35 + 3.6% / year 18 30 29,7 31,2 33,2 33,1 34,4 35,5 31,8 32,5 14 14,6 15,2 15,9 15,6 17,0 17,1 18,9 20,4 25 05 06 07 08 09 10 11(e) 12(p) 10 05 06 07 08 09 10 11(e) 12(p) CNIEL / FAO Food Outlook 6
Growth dynamics in main dairy producing countries rolling 12 month basis 93 91 millions de tonnes USA 143 141 millions de tonnes EU 27 21 millions de tonnes 89 139 19 87 85 137 135 17 New Zealand 83 9 2010 2011 2012 millions de tonnes Japan 133 33 2010 2011 2012 millions de tonnes Russia 15 10 2010 2011 2012 milliards de litres Argentina 8 32 8 7 31 6 6 2010 2011 2012 30 2010 2011 2012 4 2010 2011 2012 10,0 milliards de litres Australia 9,5 NB : deliveries in Europe and Japan CNIEL / USDA, ZMB, PZ, Alimentos argentinos, DCANZ, Dairy Australia 9,0 8,5 2010 2011 2012 8
Production by the major suppliers in 2012 Recent production tendencies among major suppliers of the world market United States Production 12 months 2012: + 1.8% EU - 27 Deliveries 12 months 2012: + 0.6 % Argentina Deliveries* 12 months 2012: + 0.8 % Australia Production 12 months 2012: + 2.3% * Survey of 20 dairy plants representing 2/3 of deliveries CNIEL / USDA, Dairy Australia, Commission, Alimentos argentinos, ZMB New Zealand Deliveries 12 months 2012: + 8.1 % 9
Geographical variations of dairy product consumption Apparent dairy product consumption levels in 2012 (kg per capita) Canada 242 Russia 245 Mexico 108 USA 276 EU 287 Algeria 153 Iran 90 India 105 China 38 Japan 71 Philippines 10 World average: 108 kg/capita Brazil 173 Argentina 237 Less than 50 kg 50 to 100 kg Indonesia 13 100 to 200 kg More than 200 kg Australia 309 CNIEL / IDF, FAO Food Outlook, PRB
Geographical variations of dairy product consumption Apparent per capita consumption (kg in milk equivalent) 2006 2012 % World 101 108 +7 Asia 61 71 +16 Africa 42 48 +14 Latin America 129 151 +17 Russia + Ukraine + Belarus 253 255 +1 EU + North America + Australia + New Zealand 290 284-2 CNIEL / IDF, FAO Food Outlook, PRB
Demand is sustained on main markets Recent import tendencies on substantial markets United States Imports 12 months 2012 Cheese : +8% Caseins : -3% Russia Imports* 12 months 2012 Butter : -8% Cheese : +7% Japan Imports 12 months 2012 Cheese : +9% Brazil Imports 12 months 2012 WMP : +29% Cheese : -29% Algeria Import 11 months in 2012 SMP: - 12% WMP: - 8% China Imports 12 months 2012 SMP : +29% WMP : +27% Whey : +10% *Russian imports do not account for volumes originating from Belarus NB: Evolution of imports based on volume CNIEL / Ubifrance, national customs 12
Presence on the world market Recent export tendencies among major suppliers of the world market United States Exports: 12 months in 2012 Skim milk powder: +2% Cheese: +16% EU - 27 Exports: 11 months in 2012 Skim milk powder: +5% Whole milk powder: stable Butter: +12% Cheese: +14% Whey: +10% Argentina Exports: 12 months 2012 Whole milk powder: -1% Cheese: -10% Australia Exports: 12 months 2012 Skim milk powder: +21% Whole milk powder: -3% Cheese: stable New Zealand Exports: 12 months in 2012 Skim milk powder: + 9% Whole milk powder: +15% Butter: +8% Butter oil: +33% Cheese: +25% NB: Evolution of exports on a volume basis CNIEL / USDA, Dairy Australia, Commission, ZMB, Ubifrance, national customs 13
World market prices booming FOB price in Oceania US$ 1,000 / tonne up until March 5 2008 2009 2010 2011 2012 5 2008 2009 2010 2011 2012 4 4 3 2 BUTTER 3 2 SMP 1 1 5 2008 2009 2010 2011 2012 6 2008 2009 2010 2011 2012 4 5 3 4 2 WMP 3 CHEDDAR CHEESE 1 2 CNIEL / USDA 14
Farmgate milk prices throughout the world 40 35 / 100 kg Germany 2011 50 45 USD / 100 kg USA 2011 30 2012 40 25 35 20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 30 2012 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 45 40 35 / 100 kg 2011 the Netherlands 60 55 50 NZD / 100 kg 2011 New Zealand 2012 30 2012 45 25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec CNIEL, ZMB, PZ, USDA, LTO NB: fat and protein content references differ from one country to another. 15
Absorbed by high input prices 300 250 / tonne 07 09 11 Feed wheat Market price- European average 13 300 250 / tonne 07 09 11 Fodder maize Market price European average 13 200 200 150 150 100 100 700 USD / tonne 07 09 11 13 150 USD / baril 07 09 11 13 500 100 300 100 Soya meal Brazil FOB 45-46% proteins 50 0 Brent crude oil spot FOB Eurostat, USDA, CLAL 16
SUMMARY Slow down of supply likely to keep market under pressure High levels of exports throughout 2012 for major suppliers stocks declining Very good market perspectives for months to come But profitability of dairying still at stake due to high input prices A risk of milk and dairy product shortage for - 2014? 18
Thank you for your attention