IFCN highlights the global challenges for dairy

Published 26 August 14


Benchmarking might be increasingly common between farms in discussion groups, local areas or even within the UK – but can our dairy industry learn anything from benchmarking in dairy sectors in other countries?

As a member of the International Farm Comparison Network (IFCN), DairyCo has access to data from 55 major milk producing countries around the world, compared using a typical farm model approach and updated annually.

Further explanations available on the typical farm model (TIPI-CAL) at IFCNdairy.org.

While every country is different, it was evident at this year’s IFCN conference – themed the ‘Development of a Sustainable Dairy Sector’ – that many challenges are now global, as Europe faces the removal of quotas and developing countries look to modernise.

Alberto Menghi described how retailer pressure in Italy is eroding premium farmgate prices for milk that is going into Protected Designation Origin (PDO) cheeses such as Parmesan.

Change may also be on the cards with the country still dominated by herds of less than 50 cows, high production costs and uncertainty about the impact of a predicted 10% increase in production following the abolition of quotas.

While its costs of production are some of the highest in Europe, Finland has a positive trade balance with more milk products exported than imported, reported Finnish representative Olli Niskanen. Russia is Finland's third-biggest export market; its companies are major suppliers of milk and other dairy products to Russian supermarkets and this has seen growth for several years.

However, it should be noted that the conference took place before the recent trade bans announced by Russia in light of EU sanctions, which could impact Finland heavily. On the domestic front, Olli mentioned that demand is high for products which are not easily interchangeable with imports; however, the end of quotas may still challenge the industry if imports increase.

Lean 3Presenting for China, Sam Shi emphasised the scale of the domestic market – every year 16 million babies are born and seven million students graduate from university.

Of the total Chinese population of 1.3 billion, around 800 million now live in urban areas, where milk consumption is around three times higher than in rural areas. Incomes are also increasing by around 9% per annum.

The Chinese Government has a target of almost doubling milk production from the current 36 million tonnes to 64 million tonnes by 2020. Despite the common perception of a plethora of large scale dairies in China, the average milk yield is 5,400kg and 70% of herds have 50 or fewer cows.

Another emerging economic super power, India, is also looking to grow and improve its dairy sector. Prashant Tripathi outlined the industry-led Indian Dairy Vision 2030 plan, mentioning that the sector is very important, contributing to a third of Indian agricultural GDP, despite the average number of cows per herd being in single figures.

The 2030 plan looks at improvements along the entire supply chain to the consumer and key points of focus are increasing animal productivity, developing extension services, investing in value-added products and promoting A2 milk. To achieve this, the industry is asking for, among other measures, access to huge amounts of capital to develop necessary infrastructure for clean milk production, chilling, transportation, processing, breeding programs, feed and fodder.

This is just a taster of the information available through IFCN; the full financial comparisons will be available in the autumn which will be reported in DairyLeader, meanwhile an extract of last year’s report can be found here.