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 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 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??? Stay on top to meet or beat above Challenges