THE WORLD DAIRY SITUATION 2016

Bulletin of the International Dairy Federation 485/2016

Price: 500 Euros ISSN 0250-5118

THE WORLD DAIRY SITUATION 2016

CONTENTS

Foreword ....................................................................................................... 2
Message from the WDS Team ................................................................................ 3
Summary ........................................................................................................ 4
World Dairy Situation at a Glance ........................................................................... 5
Chapters:
1. Milk Production ............................................................................................. 7
2. Milk Processing ............................................................................................ 11
3. Dairy Industry ............................................................................................. 19
4. Consumption............................................................................................... 29
5. World Dairy Trade ........................................................................................ 41
6. Prices ............................................................................................................... 51
Annex 1: Dairy Sector in the Netherlands ............................................................... 61
Annex 2: Country Reports .................................................................................. 69
• Asia ....................................................................................................... 71
• European Union......................................................................................... 93
• North and Central America .......................................................................... 143
• South America ......................................................................................... 151
• Other Europe........................................................................................... 163
• Africa ........................................................................................................... 177
• Oceania ................................................................................................. 187
Annex 3: Tables .................................................................................................... 193
• Dairy Farming .......................................................................................... 195
• Processing .............................................................................................. 203
• Trade ........................................................................................................... 221
• Consumption ........................................................................................... 225
• Prices........................................................................................................... 231
Annex 4: Dairy Leaders in Different World Regions ................................................... 239
Annex 5: Global Marketing Trends ....................................................................... 245
Annex 6: Dynamics in World Trade ...................................................................... 251
Abbreviations and Conventional Signs .................................................................. 259

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 BULLETIN OF THE
THEINTERNATIONAL
WORLD DAIRY SITUATION
DAIRY FEDERATION
FOREWORD
We are delighted to present the 2016 World Dairy
Situation Report. This highly valuable publication
is produced annually by the International Dairy
Federation (IDF) as part of its mission to represent
and support the dairy industry globally. The report
contains a wealth of information about the
international dairy sector- including data tables,
graphs, Country Reports and analyses for more
than fifty dairy-producing countries from all five
continents. Every aspect of the industry is
covered: from milk production and processing, to
trade, pricing and consumption.
The global dairy sector continues to face
challenging times: milk prices have been on the
decline in most parts of the world for the past two
years and are currently rather low. While some
degree of price recovery in the medium to long
term is expected, a considerable level of
uncertainty remains due to the increased
production recently witnessed in the United
States and the European Union, as well as the
state of the global economy and geopolitical
landscape.
While the long-term global demand for dairy
products continues to increase- primarily as a
Gilles Froment
Chair- IDF Standing Committee on
Dairy Policies and Economics
2016 485/2016
result of population and dairy consumption
growth- the worldwide increase in milk production
is currently not matched by corresponding
demand. Overall demand for solids-not-fat is not
increasing at the same rate as butterfat, resulting
in growing inventories of several dairy products-
milk powder in particular.
We would like to thank all IDF National
Committees, the IDF Standing Committee on Dairy
Policies and Economics, other international
organisations and partners, as well as members
and experts who contributed their time and
expertise to this report. We extend a special thank
you to the teams at ZuivelNL and the Centre
National Interprofessionnel de l’Economie Laitière
(CNIEL), who helmed the production of this
important publication.
We hope that you will find this comprehensive
report helpful in furthering your understanding of
current macro supply and demand trends
affecting the dairy sector, as well as the wide
range of policies and economic factors influencing
them in a world increasingly focused on
sustainable development and nutrition.
Nico van Belzen
IDF Director General
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 THE WORLD DAIRY SITUATION 2016
MESSAGE FROM THE TEAM
For the 7th year in a row, the IDF’s World Dairy
Situation report is the product of a Franco-Dutch
collaboration: the editing team is composed of
dairy experts from the Paris-based Centre
National Interprofessionnel de l’Economie Laitière
(CNIEL) and the Dutch Dairy Inter-branch
Organisation (ZuivelNL). This year, we have
compiled and edited data of no less than 54
Country Reports, thanks to contributions received
from IDF National Committees and other national
dairy organisations, whom we sincerely thank.
Such a comprehensive report would not have
been possible without the collective effort of all
those participating under the auspices of the IDF.
While trying to remain faithful to the spirit of
previous editions, we nevertheless continually
seek to improve the form and substance of the
World Dairy Situation report. Readers are more
than welcome to send their feedback and
suggestions for improvement to info@fil-idf.org.
This year, we slightly modified the general layout
to facilitate reading: the text is presented in two
columns on the left-hand page, with
corresponding illustrations to the right. Every
year, we try to include new Country Reports to
provide an ever broader picture of dairying
around the world: this year’s edition includes
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content from new contributors Cyprus and
Luxembourg. All Country Reports now feature
general information on the country's economy in
order to provide a better sense of the relative
weight of local agricultural markets. As usual, a
full chapter is dedicated to the dairy sector of the
IDF World Dairy Summit’s host country. In 2016, it
is the Dutch dairy industry that is described in
detail. Unlike previous editions, this year’s Trade
chapter looks at the entire range of dairy
products, and includes data on butter, butteroil
and dairy spreads expressed in butter equivalents.
Moreover, the Consumption chapter, which is
usually based on our own calculations of apparent
dairy consumption, is now supplemented by the
findings of the 2016 IDF Global Marketing Trends
survey. The survey, which includes data from 27
countries, was jointly carried out by IDF’s Standing
Committees on Marketing and Dairy Policies and
Economics, in order to assess past and future
trends in household dairy consumption, as well as
its barriers and drivers.
We wish you a pleasant reading experience and
hope that you will find all the data and
information you are looking for in this report.
Veronique Pilet
Responsible Editor
 BULLETIN OF THE
THEINTERNATIONAL
WORLD DAIRY SITUATION
DAIRY FEDERATION
SUMMARY
The International Dairy Federation presents its
annual World Dairy Situation report- an in-depth
analysis of the global dairy sector. The editing
team aim to include the most accurate data and as
many countries as possible.
Country Reports are primarily based on
questionnaires completed by IDF National
Committees and other national contributors, as
well as on official data from various recognised
sources. The report not only provides a thorough
and detailed overview of the current dairy
situation, but it also allows individual states to
present information on their own dairy sectors.
2015 was marked by an imbalance in dairy supply
and demand. Total milk production was estimated
at 818 million tonnes, a whole 2.0% more than
2014. Abundant milk deliveries led to increased
dairy product output in all categories excepting
whole milk powder. Global dairy trade followed
suit, growing significantly: the equivalent of nearly
9% of global milk output is currently traded
internationally. However, demand from importing
countries could not absorb the additional output
2016 485/2016
on the market, which resulted in a sustained drop
in dairy prices throughout the year. Average 2015
farmgate milk prices plunged dramatically from
their 2014 highs. Mergers and acquisitions
continue to intensify and are becoming
increasingly global. International projections show
a population of nearly 10 billion in 2050, which
means increased demand for food in the coming
decades. In 2015, global per capita dairy
consumption was estimated at 111.3 kg.
According to the OECD and FAO, this number
should increase 12.5% by 2025. Consumption in
developing countries should increase further still.
These trends are confirmed by national experts
who completed the “Global Marketing Trends”
survey on predicted household dairy consumption
in the coming decade.
The report aims to give an overview of the latest
dairy data from around the world- starting with
production, processing and industry; to
consumption, trade, and price forecasts. In-depth
analyses of current trends, recent developments
and expected changes are also provided.
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 THE WORLD DAIRY SITUATION 2016

WORLD DAIRY SITUATION AT A GLANCE

MILK PRODUCTION
World: milk production by species World: cow’s milk production (share per region)
mln tonnes
Oceania
Africa 5%
2015 5%
Other Asia
2014 Europe 29%
9%
2013 South
America
2010 10%

2005

0 200 400 600 800 1 000 EU 28

Cow milk Buffalo milk Other milk 24%

MILK PROCESSING
World: cow’s milk deliveries(A) World: dairy product output, growth 2005/15(A)
mln tonnes mln tonnes
450 25

23%
420 20
CAGR '05-'15: +1.8%
390 15
39%
360 10

43% 29%
330 5

300 0
2005 2007 2009 2011 2013 2015 Butter/-oil Cheese SMP WMP
(A) In surveyed countries.

CONSUMPTION
World: per capita consumption and population World: self-sufficiency rate (per region)
kg mln inhabitants Region 2005 2015
115 7 400 Asia 92% 90%

110 7 200 Europe 106% 111%

EU 109% 112%
105 7 000
Non-EU 101% 108%
100 110.6 111.3 6 800
108.4 North America 102% 108%
106.1
95 101.5 6 600 South America 102% 101%
Africa 84% 83%
90 6 400
2005 2010 2013 2014 2015 Central America 75% 78%
Per capita consumption World population Oceania 245% 309%

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 BULLETIN OF THE
THEINTERNATIONAL
WORLD DAIRY SITUATION
DAIRY FEDERATION
2016 485/2016

WORLD DAIRY TRADE

World trade: key exporters, export share(B)

< 5% 15 – 25%
5 – 15% > 25%

World trade: top 5 exporters(B) World trade: dairy products

mln tonnes mln tonnes
25 3.0

20 2.4

15 1.8

10 1.2

5 0.6

0 0.0
2005 2007 2009 2011 2013 2015 Butter/-oil Cheese SMP WMP
EU 28 New Zealand USA
2005 2010 2014 2015
Australia Argentina
(B) In milk equivalent.

PRICES
World: dairy product prices World: producer milk prices
2015 2014/15
USD per tonne (USD/100kg)
6 000
Argentina 31.38 -11.4%
Australia(C) 35.37 -10.2%
4 800
Brazil 29.67 -31.6%
China 63.67 -9.8%
3 600
EU 28 34.22 -30.9%
France 33.30 -29.4%
2 400 Germany 32.50 -34.9%
Netherlands 37.72 -32.7%
1 200 Poland 29.33 -30.1%
India(D) 41.19 -2.0%
0 New Zealand 26.43 -52.8%
2007 2010 2013 2016
Russia 33.88 -33.7%
Cheddar Butter SMP WMP USA 37.70 -28.7%
(C) Dairy years ending June of the following year.
(D) Mixed (cow and buffalo) milk; refers to cooperatives only.