Transcript Slide 1

Canadian Dairy Market
- An Overview
Global Dairy
Othe r
20%
EU 15
22%
LATAM
10%
CIS
11%
South As ia
20%
Oce ana
4%
USA
13%
World Largest Producers
90
80
70
60
- Million Tons
- Calendar Year 2004
50
40
30
20
10
0
India
USA
Russia
Germany
France
B razil
China
UK
New
Zealand
Ukraine
Canadian Dairy at a glance
 Canadian milk renowned for excellence Quality Standards in farms & processing plants
 in 2005, dairy production generated farm receipts of $ 4.8 Billion
 Dairy industry ranks fourth in the agriculture sector
 About 81% of farms located in Ontario and Quebec, 13% Western, 6% Atlantic
 Dairy population 1,546,300 heads (approx. 1,048,600 dairy cows (Jan’06 est.)
 Typical Canadian farm has 60 cows
 Nearly 38,000 people work on dairy farms, 26,000 primary processing
 Canadian dairy works under Supply Management System
 Planned domestic production
 Administered pricing
 Dairy product import controls
 In 2005, approx. 463 dairy processing plants (295 Federally inspected plants)
…. At a glance
38 %
9%
8%
3%
4%
33 %
1%
2%
2%
Production 2004/05
Dairy Cash Receipts (2005)
Number of farms with shipments of milk or cream (Jul 05)
Dairy Cows (Jan 05)
Dairy Heifers (Jan 05)
75,237,235 Hectolitres
$ 4,841,686,000
16,224
1,006,400
498,600
…. At a glance
 Canadian dairy famous for superior genetic quality of its cattle herd
 Live dairy cattle exports for breeding to NA, EU and Asia Pacific
 Canadian cows enrolled on official milk recording
 Produce average of 9,442 Kg of milk per cow (305 days lactation)
 Canadian milk has an average content 3.21% protein & 3.76% fat
 The Holstein is most common dairy breed (93% of dairy herd)
 OIE standards are being put in place
Processing of Dairy Products
 Fluid milk market (table & fresh cream ) represents 38% of milk production
 Manufactured dairy products butter,cheese, yogurt & IC accounts 62%
 Processing sector is concentrated
16% plants owned by 3 large processors Saputo, Agropur, Parmalat
 Process approx. 70% of the milk produced
(28.3 M Hect Ltr)
(6.5 M hectolitres)
…. At a glance
Quality & Safety
 Government & various partners closely coordinate movement - “Farm to consumer”
Dairy Farmers of Canada (DFC), Dairy Processors Association of Canada (DPAC)
The Canadian dairy commission (CDC), Provincial Marketing Boards
Agriculture and Agri-Food Canada (AAFC) , Canadian dairy industry
 Canadian Dairy Commission (CDC) supports the industry
 Implement National policies
 Assessing changes in demand for milk and dairy products
 Production of milk
 Coordinating the pooling of milk revenue and market sharing system
 Canadian Food Inspection Agency (CFIA) responsible for
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Setting standards for dairy products
Plant inspections
Regulating packaging and labelling
Enforces veterinary health programs
Ensure safety of dairy products
International Trade
 In 2005, Canada exported
 Cheeses 27.1%
 Dairy spreads 18%
 Ice cream 16 %
 Major markets for dairy
 United States 48.1%
 EU 12.9% (UK 12.9%)
 Canadian dairy exports 2005 $ 242.6 Million imports 597.6 Million
 Major Imports
 Cheeses 29.2%
Casein and derivatives 18.3%
 Butter and fats & oils 11.6%
 Whole milk powder 10.6 %
Our major suppliers
 EU-25 38.6%
 New Zealand 23.9%
 United States 22.8%
Historical Production 2000-2005
(Marketing Year)
80000
70000
60000
000 Hectolitres /
Annum
50000
40000
30000
20000
10000
0
2000-01
2001-02
BC
AB
2002-03
SK
MB
ON
2003-04
QC
NB
NS
2004-05
PE
Farm Input Price Index 1999-2003
1999
2000
% Change
2001
% Change
2002
% Change
2003
% Change
% Change
Building & Fencing
123.1
5.1%
119.8
-2.7%
120.00
0.2%
122.8
2.3%
122.4
-0.3%
Machinery & vehicles
125.6
1.3%
137.7
9.6%
143.70
4.4%
143.5
-0.1%
157.0
9.4%
Crop production
121.6
-2.2%
121.5
-0.1%
137.60
13.3%
135.7
-1.4%
154.7
14.0%
Seed
129.4
-1.2%
131.2
1.4%
134.50
2.5%
142.5
5.9%
149.7
5.1%
Fertilizer
125.5
-2.5%
128.1
2.1%
159.80
24.7%
137.2
-14.1%
166.7
21.5%
Pesticides
119.5
2.1%
120.2
0.6%
124.70
3.7%
127.4
2.2%
132.8
4.2%
Crop insurance
102.2
-9.4%
87.8
-14.2%
102.20
16.5%
131.7
28.9%
171.5
30.2%
Animal production
117.5
0.4%
127.8
8.8%
135.10
5.7%
132.3
-2.1%
127.8
-3.4%
Feed
109.7
-9.3%
109.2
-0.5%
120.20
10.1%
132.5
10.2%
131.2
-1.0%
Artificial insemination
131.1
-2.2%
133.4
1.8%
133.60
0.1%
138.1
3.4%
147.0
6.4%
Veterinary Services
133.1
3.9%
133.8
0.5%
137.70
2.9%
155.0
12.6%
155.8
0.5%
Supplies & Services
112.0
0.2%
118.4
5.7%
121.10
2.3%
120.7
-0.3%
127.6
5.7%
Hired Farm Labor
113.3
-1.8%
119.5
5.5%
125.40
4.9%
128.2
2.2%
129.0
0.6%
Property Tax
113.8
2.4%
114.1
0.3%
112.60
-1.3%
118.9
5.6%
126.0
6.3%
Farm Rent
120.5
-1.5%
113.8
-5.6%
113.80
0.0%
121.8
7.0%
132.1
8.5%
0.3%
124.1
6.1%
129.5
4.4%
128.5
132.7
3.3%
Tota Farm Inputs
1992 = 100
117
-0.8%
Dairy Cows & Heifers by Key Provinces
1600000
1400000
498,600
1200000
1000000
Heifers
Cows
800000
600000
205,000
407,000
354,800
Quebec
Ontario
400000
200000
1,066,400
158,000
0
Canada
Breeds & Average Production - Nationwide
No. of
Official
Herds
Animals on
Test
Milk (Kg)
Fat (Kg)
Fat
%
Protein
(Kg)
Protein
%
BCA
Milk
Fat
Prote
in
Ayrshire
288
9,828
7,354
292
3.98%
244
3.32%
211
203
213
Brown Swiss
146
1,397
7,792
319
4.12%
270
3.48%
201
205
199
Canadienne
22
216
5,377
225
4.21%
191
3.57%
190
177
196
Guernsey
38
468
6,398
286
4.50%
219
3.43%
194
173
186
Holstein
5190
264,762
9,624
354
3.71%
306
3.19%
209
208
209
Jersey
518
8,927
6,279
303
4.85%
236
3.77%
210
187
208
Milking Shorthorn
27
217
6,516
240
3.70%
214
3.30%
234
214
236
Yearly Production – 2005 basis
Average Raw Milk Yield per Cow
Country
Kgs / Year
Canada
United States
Japan
European Union
Australia
New Zealand
Mexico
9,500
8,235
7,400
6,000
4,906
3,700
1,397
2003 Comparison
Dairy Products Production Possibilities
Raw
Milk
Fluid Milk
Products
Flavored
Milk
Whole
Low fat,
Non-fat milk
Dairy
Desserts
Low Lactose
Milk
Liquid
Infant Milk
Recombined
Products
Milk Powder
Anhydrous
Milk Fat
Enzyme
Modified
Dairy
Products
Cheese
Whey
Products
Milk
Protein
Hydrolysates
Milk
Protein
Products
High Fat
Low Fat
Dairy
Spreads
Cultured
Milk
Fractionated
Fat
Butter Veg
Fat mix
Feed
Modified
Fat
Milk Utilization per Class
Class 5 a,b,c
Class 4 m
6%
5%
Class 4
6%
Class 5 d CEM
4%
0%
Class 1
38%
Class 3
36%
Class 1
Class 2
5%
Class 2
Class 1
Class 2
Class 3
Class 4 a,b,c,d
Class 4 m
Class 5 a, b,c
Class 5 d
Class 3
Class 4
Class 4 m
Class 5 a,b,c
Class 5 d
CEM
Fluid milk, Fluid cream & Milk-based beverages
Yogurt, Sour cream & Ice-cream
Speciality cheese & Cheddar
Butter, Butteroil, Powders, Concentrated milk & unclassified products
Marginal markets
Special classes – Dairy ingredients
Special classes – Planned exports and other exports
Milk Components Content
kg / hl
ONTARIO
QUEBEC
CANADA
04/05
03/04
02/03
01/02
Butterfat
3.88
3.87
3.88
3.88
Protein
3.31
3.3
3.33
3.36
Other Solids
5.76
5.76
5.72
5.76
Butterfat
4.02
3.97
3.98
3.98
Protein
3.36
3.35
3.34
3.33
Other Solids
5.65
5.7
5.71
5.68
Butterfat
3.88
3.85
3.87
3.88
Protein
3.31
3.31
3.32
3.33
Other Solids
5.69
5.7
5.69
5.69
Fluid Milk Sales - Canada
Year
(Marketing)
3.25%
2%
1%
Skim
Buttermil
k
Chocolate
Milk
Eggnog
000 Litres
Total Sales
2004 / 05
407,732
1,251,859
568,047
279,417
13,612
173,950
9,619
2,704,236
2003 / 04
424,603
1,285,770
569,849
273,831
14,194
167,736
10,070
2,746,053
2002 / 03
422,715
1,270,432
544,597
272,575
13,240
156,058
10,392
2,690,009
2001 / 02
431,014
1,285,277
536,464
276,181
12,775
155,857
10,499
2,708,067
2000 / 01
435,491
1,310,815
532,740
265,664
11,996
145,932
10,635
2,713,273
Day to day Challenges to Dairy Purchasing
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Closely Monitor Production
Ensure Food safety
Maintain a close tab on type of Cows & yields by type
Support prices
Other influencing factors to the dairy market
Farm income
Herds average age – cows on feed
Quality of milk – buying discount
Milk processing costs etc
An eye over the industry future developments
Milk collection centers performance
Seasonality impacts , weather
Logistics / avoid transit losses
Innovation support
Environmental protection
Long-term contracts
Strategic partnering to ensure sustained supply and desired quality
Industry regulations and developments
Key competition for Nestle / Key players???
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Stay on top to meet or beat above Challenges