Globally Dairy products and farmers are currently seeing positive growth, especially in the developing nations. Global milk production is increasing, and this is being led by countries such as China, India, Pakistan and countries in South America.
Asia replaced Europe as the world’s largest milk production region in 2006, and now accounts for 34% of the global output. Output declined in Australia due to extreme drought conditions, and also in Europe, but the USA and New Zealand had slight increases.
Prices for Dairy products on the global market have increased significantly in 2006-2007. This has been mainly due to increased demand from many developing countries, and decrease in output from Australia due to the extreme drought conditions. Skim milk powder which had been steady at around $2000USD per tonne has increased to over $4000USD per tonne in the last 12 months. Indications are the prices will remain at these levels for the next 12-18 months at least, because of the world demand for dairy products.
This has had a positive flow on effect to dairy farms in many countries, as the price for farm gate milk has increased significantly.
In regards to farms themselves, we are seeing consolidation in developed countries, where there are not as many farms, but the herd numbers per farm are increasing. There are some very big farms being built in areas where land is plentiful, such as Chile, Argentina, Ukraine, Russia & Mexico. In other smaller developing countries the farm numbers are increasing, along with the herd sizes. Money is being provided by Government, and the milk companies to help farms increase their production.
One of the biggest challenges for the developing countries is to improve the milk quality from the farms, so it can be manufactured into quality consumer product.
In conclusion, the dairy industry world wide is looking quite positive and indications are that growth and demand for dairy product will continue in the future. |
Introduction
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