“The economic recovery experienced in 2010 meant a boost to the worldwide demand for dairy products, resulting in major volume increases for most products traded around the globe”, explained Adriaan Krijger, editor of the publication.
Another important conclusion is the influence of developing markets on global dairy trade: “Consumption of food is growing most rapidly in developing markets, due to population and income growth. The dairy sector is benefiting significantly, and the growth in demand for dairy products continues to be one of the strongest of the major commodity groups.”
World Milk Production
World milk production growth increased 1.8% in 2010, from 709 to 721 million tonnes. Cow milk represents 83% of the total milk produced globally, and the annual growth in 2010 (+1.6%) was higher than in 2009 (+0.9%), but still below the average growth in the last ten years (+2.1%).
Higher milk prices stimulated production, while bad weather conditions and natural disasters prevented growth in some parts of the world.
Production increased more in Western Europe than in the eastern part. There was moderate growth in Italy, Germany and the Netherlands, sustained in the UK and France while Ireland had an impressive production growth of +8.1%. Production decreased in most eastern countries, notably Poland -1.3% and Romania -7.9%.
China is recovering from the melamine scandal, and production increased +1.6%. Consumer confidence continues to be damaged.
USA showed a moderate growth of +1.8%.
Australian production increased (+0.9%) after several years of problems with droughts. New Zealand experienced very dry conditions and growth only reached 1.1%.
Consumer demand in India is increasing, and resulted in an annual growth of +3.1% in 2010.This trend is expected to continue.
Most South American countries saw increased growth in milk production, in Argentina +2.5%.
Buffalo milk production in 2010 was 93 million tonnes, making 13% of total world milk production (compared to 8% in 1990). India and Pakistan produce more than 90% of the total volume of buffalo milk, but smaller volumes are also produced in Egypt, China, Iran and Italy.
Goat milk represents a 2.2% of total milk production, sheep milk 1.3%, camel milk 0.3%.
Most of the goat milk is produced in Asia (59%), with Africa at 21% and Europe at 16%.
Growth in goat milk production was moderate, 0.2%, and there were increases in production in Turkey (+3.5%) and France (+6.4%), and a downturn in Mexico (-1.0%), Spain (-2.9%) and the Netherlands (-8.6%).
Milk Production Trends for 2011
The first months of 2011 have shown large geographical variations.
In the southern hemisphere there has been a strong increase in production:
- New Zealand: +12% in Jan-Feb
- Argentina: +16% first half of 2011
- Brazil: +4.1% first quarter
- Chile: +12.6% first half of 2011
- Australia had a rather moderate growth of +0.9% during the first half of 2011.
In the northern hemisphere EU presented a moderate increase (+2.2% first half of the year) as did the US (+1.6% first seven months), while Japan and Russia showed a down turn of -4.4% first five months and -1.9% in first half of the year, respectively.
China is predicted to increase production during 2011.
Cow milk deliveries increased globally by 2.1% in 2010. Milk deliveries increased in the EU (1.3%), the US (1.9%), Australia (+0.9%), South Africa (+5.1%) and Norway (+0.3%). China showed a growth of +4.5% and Australia +7.0%.
Deliveries decreased in Japan (-2.4%), South Korea (-1.8%) and Ukraine (-2.6%).
World output increased for every product in 2010, but growth was quite small for skim milk powder due to large quantities of stocks that discouraged production in Europe and did not stimulate production elsewhere. Demand for WMP and cheese were strong and WMP production recovered from 2009 drop, stimulated by demand from Asia and the Middle East. Cow's milk cheese and butter showed a steady growth.
24 dairy companies generated a turn over of more than 3 billion US dollars in 2010. These 24 leaders come from 14 countries in 4 continents.
Most dairy companies experienced growth in 2010, when expressed in national currency. This is mainly due to the strong increase in dairy product prices.
Mergers and aquisitions picked up again. French company Lactalis bought three companies in Spain and became the national leader. Lactalis in Italy took control over Parmalat, which boosted the company's global turn over, which will be around 17-18 billion USD in 2011.
French Sodiaal took over Entremont and the Americal General Mills took over 51% of Yoplait, leaving the rest with Sodiaal.
In Germany, Nordmilch and Humana merged their operative businesses. The new group, called Deutsches MilchKontor (DMK) belongs to the top 15 in the world.
Arla Foods merged with Hansa Milch, PepsiCo and Danone became the new leaders in the Russian dairy sector. reorganization is also very active in Brazil, where Monticiano Participacões and Bom Gosto merged to form a new no. 2 national dairy, Lácteos Brazil.
China is starting to invest abroad, mainly in New Zealand, Netherland and France.
World Milk Consumption
World milk consumption per capita increased +1% from 103.5 to 104.7 kg in 2010.
Milk consumption per region:
- Asia: 39%
- Europe: 29%
- North America: 13%
- South America: 9%
- Africa: 6%
- Central America (incl Mexico): 3%
- Oceania: 1%
Asia is the largest consuming region, but consumption per capita (67 kg) is low compared to i.e. Europe (277 kg). This is due to the fact that in more developed dairy regions like the EU, North America and Oceania, dairy products are considered staple foods, while in other regions they are not part of a traditional diet, and is often considered to be luxury goods.
Strongest growth in consumption compared to 2007-2009 occurred in South America (+7%), Brazil and Argentina being main contributors to this increase. There was strong growth in Asia as well (+6%), while other American regions and Africa showed a slight increase. European consumption is declining, both in EU and non-EU countries. Oceania shows the largest decline in consumption.
Countries in Northern Europe have the highest consumption per capita of liquid milk in the world. Estonia, Ireland, Finland, UK and Iceland have a consumption per capita of more than 100 kg, with consumption quantities in Estonia, Ireland and Finland being twice as high as the average consumption in the EU as a whole.
Highest per capita butter consumption is found in Western Europe, with France at the top (7.5 kg per capita, twice as high as the EU average).
Western Europe have the highest average consumption of cheese, with Luxembourg and France at the top, both countries consuming more than 25 kg per capita.
World Dairy Trade
In 2010 world dairy trade volume (excluding intra-EU trade) amounted to about 51.9 million tonnes milk equivalents (non-fat solid content). This was nearly 9% above previous year.
The strong world dairy trade in 2010 had its basis in both a strong recovery of exports from the US and in a further growth of EU exports.
Milk prices recovered during 2010. In Europe milk prices paid increased by 15% compared to 2009, in New Zealand milk price increased by 22% and in the US by 27%. In the first half of 2011 milk prices held up very well.
Short term forecasts from FAO and FAPRI look favorable for 2011: Sustained growth in China, India; Argentina and Brazil. Small increases in EU, USA and Mexico; decreases in Japan, Russia and Ukraine and growth in Oceania.
For the longer term FAO-OECD and FAPRI forecast global milk production growth of 1.8-1.9% per year.
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