Transcript Global Dairy Overview & Outlook April 3, 2012 Hoogwegt Groep BV • Founded in 1965, based in Arnhem, The Netherlands • International marketers of dairy.

Global Dairy Overview & Outlook
April 3, 2012
Hoogwegt Groep BV
• Founded in 1965, based in Arnhem, The
Netherlands
• International marketers of dairy ingredients &
commodities
• Largest private dairy trading company with
global network of 13 distinct business units
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Worldwide network
Hoogwegt International
Hoogwegt Milk
Havero Hoogwegt
Hoogwegt Cheese
Apollo Milk
Rumi
Rumi Algeria
Hoogwegt Poland
Hoogwegt U.S., Inc.
Good Home Foods LLC
Hoogwegt Purchases
Hoogwegt Australia
Pacific Dairy Ingredients
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Hoogwegt - A True Global View
• Active in all major producing and
consuming markets
• Export to over 110 countries worldwide
• Network provides Hoogwegt with critical
market access and market information
• Rich history of trading skills and volatility
management
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Outline
• International trade landscape
• Implications for U.S. dairy industry
• U.S. is at a crossroads
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Milk Production
Cows Milk Production and Exports - 2011
150 000
(000 MT)
120 000
90 000
60 000
30 000
EU
US
India
Russia
China
Domestic use
Brazil
NZ
Argentina
Ukraine
Australia
Exports
Sources: EuroStat, USDA, DCANZ, DairyAustralia, Argentine Secretary of Agriculture, GTIS. EU and Argentina are milk deliveries.
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Milk Production – Major Exporters
Cumulative milk production growth since 2005
10 000
US
8 000
(000 MT)
6 000
EU
4 000
NZ
Argentina
2 000
0
05
06
07
08
09
10
11
Australia
-2 000
EU
US
NZ
Australia
Argentina
Source: EuroStat, USDA, DCANZ, DairyAustralia, Argentine Secretary of Agriculture. EU and Argentina are milk deliveries.
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Dairy Product Production – Major Exporters
NZ Production, 2005 vs. 2011
8 000
1 200
6 000
900
(000 MT)
(000 MT)
EU Production, 2005 vs. 2011
4 000
2 000
300
-
WMP
SMP
2005
Source: USDA
600
Cheese
2011
Butterfat
WMP
SMP
2005
Cheese
Butterfat
2011
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Dairy Product Production – Major Exporters
Argentina Production, 2005 vs. 2011
500
600
375
450
(000 MT)
(000 MT)
Australia Production, 2005 vs. 2011
250
300
125
150
-
WMP
SMP
2005
Source: USDA
Cheese
2011
Butterfat
WMP
SMP
2005
Cheese
Butterfat
2011
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Dairy Product Production – Major Exporters
U.S. Production, 2005 vs. 2011
6 000
(000 MT)
4 500
3 000
1 500
WMP
SMP
2005
Source: USDA
Cheese
Butterfat
2011
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Whole Milk Powder Exports
WMP exports
1200
NZ
(000 MT)
960
720
480
EU
240
Argentina
Australia
0
US
05
06
EU
07
US
NZ
08
Australia
09
10
11
Argentina
Source: GTIS
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Whole Milk Powder Imports
WMP imports
350
China
(000 MT)
280
Algeria
210
140
Venezuela
Singapore
70
Sri Lanka
0
05
China
06
Algeria
07
08
Venezuela
09
Singapore
Source: GTIS; Algeria and Venezuela extrapolated from partial-year numbers.
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Sri Lanka
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Skim Milk Powder Exports
SMP exports
600
EU
480
(000 MT)
US
360
NZ
240
120
Australia
0
05
06
07
EU
US
08
09
NZ
Australia
10
11
Source: GTIS
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Skim Milk Powder Imports
SMP imports
220
Mexico
(000 MT)
176
Indonesia
China
Algeria
Philippines
132
88
44
0
05
Mexico
06
07
China
08
Indonesia
Source: GTIS. Algeria extrapolated from 11-month numbers.
09
Algeria
10
11
Philippines
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Cheese Exports
Cheese exports
750
EU
(000 MT)
600
450
NZ
300
US
Australia
150
Argentina
0
05
06
EU
07
US
08
NZ
Australia
09
10
11
Argentina
Source: GTIS
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Cheese Imports
Cheese imports
320
Russia
256
(000 MT)
Japan
192
US
128
Mexico
64
Korea
0
05
06
Russia
07
Japan
08
US
09
Mexico
10
11
Korea
Source: GTIS
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Butterfat Exports
Butterfat exports
500
NZ
(000 MT)
400
300
200
EU
100
US
Australia
Argentina
0
05
06
EU
07
US
08
NZ
Australia
09
10
11
Argentina
Source: GTIS
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Butterfat Imports
Butterfat imports
120
96
(000 MT)
Russia
72
Iran
48
China
Mexico
Morocco
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0
05
06
Russia
07
Iran
Source: GTIS. Iran data unavailable for 2005-08.
08
China
09
Mexico
10
11
Morocco
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Whey Products Exports
Whey products exports
500
EU
US
(000 MT)
400
300
200
Argentina
100
Australia
NZ
0
05
06
EU
07
US
08
NZ
Australia
09
10
11
Argentina
Source: GTIS
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Whey Products Imports
Whey products imports
400
China
(000 MT)
320
240
160
Indonesia
80
Mexico
Japan
Thailand
0
05
China
06
Indonesia
07
08
Mexico
Source: GTIS; Indonesia extrapolated from partial-year numbers.
09
Japan
10
11
Thailand
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Aggregate Imports
Aggregate imports - selected products
China
900
(000 MT)
720
540
Russia
Mexico
Algeria
360
Indonesia
180
0
05
06
China
07
Russia
08
Mexico
Includes WMP, SMP, cheese, butterfat and whey products.
Source: GTIS. Algeria extrapolated from 11-month numbers.
09
Algeria
10
11
Indonesia
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Aggregate Imports
Aggregate net imports - selected products
900
SE Asia
720
(000 MT)
Russia
ME/NA
540
China
360
Mexico
180
0
05
SE Asia
06
ME/NA
07
China
08
Russia
09
10
Mexico
Includes WMP, SMP, cheese and butterfat.
Source: FAPRI. SE Asia includes Indonesia, Malaysia, Philippines, Thailand and Vietnam. ME/NA includes
Algeria, Egypt and Saudi Arabia.
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Benchmark Prices
2,75
0,90
2,35
0,77
1,95
0,64
1,55
0,51
1,15
0,38
0,75
0,25
0,35
0,12
03
04
05
SMP
06
WMP
07
08
Cheese
09
Butter
10
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($/lb. - whey)
($/lb. - SMP, WMP, cheese, butter)
World dairy prices
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Whey
Source: USDA’s “Dairy Market News.” WMP, SMP, cheese and butter are Oceania. Whey is EU.
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Benchmark Prices
2,40
0,72
2,15
0,66
1,90
0,60
1,65
0,54
1,40
($/lb. - Whey)
($/lb. - Cheddar, Butter, SMP, WMP)
World dairy prices, 2011-12
0,48
2011 5
9
13 17 21 25 29 33 37 41 45 49 2012 5
SMP
WMP
Cheese
Butter
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Whey
Source: USDA’s “Dairy Market News.” WMP, SMP, cheese and butter are Oceania. Whey is EU.
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Global Marketplace: Current Situation
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Implications for the United States
25,00
5200
22,50
4600
20,00
4000
17,50
3400
15,00
2800
12,50
2200
10,00
1600
J-06
J
J-07
J
J-08
J
All-Milk price
J-09
J
J-10
J
J-11
J
(Oceania SMP price, $/ton)
(US All-Milk Price, $/cwt)
U.S. All-Milk price vs. Oceania SMP price
J-12
Oceania SMP price
Source: USDA, USDA’s “Dairy Market News.”
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Volatility
U.S. All-Milk Price
($/cwt.)
20,90
17,60
14,30
11,00
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
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In truth, it’s tough playing in the global market
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Why is U.S. behind EU and Oceania in the global market?
Export vs. customer?
Policy – support & CCC?
Federal order pricing – discourages investment?
Large internal market – exportable volumes?
Last in, first out
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Opportunities
U.S. exports
(as percent of milk production, TSB)
14,0
10,5
7,0
3,5
0,0
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
Source: U.S. Dairy Export Council/National Milk Producers Federation
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Need international customers if we want to grow
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Fast-food chain growth In emerging markets
Non-U.S. stores
(2010)
Change from 2009
McDonald’s
18,710
+212
KFC
11,798
+696
Subway
10,109
+1,067
Pizza Hut
5,890
+175
Starbucks
5,727
+220
Burger King
4,998
+170
Domino’s
4,422
+350
Dunkin’ Donuts
3,005
+908
802
+154
Dairy Queen
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Conclusions … we are at a crossroads
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Embrace and Adapt …
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Change…
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Policy must promote innovation, investment and growth
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Thank you.
Global Dairy Overview and
Outlook
Dairy Policy Annual Conference
Dalyn Dye
President and CEO, Hoogwegt U.S., Inc.
April 3, 2012
[email protected]
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