eu & global dairy markets prospects van belleghem.pdf · eucolait •eucolait is the european...
TRANSCRIPT
EU & Global Dairy Markets Prospects
AHDB Outlook Conference
12 February 2014
Eucolait
• EUCOLAIT is the European Association of Dairy Trade representing the European wholesalers, exporters and importers of dairy products.
• EUCOLAIT promotes the interests of the dairy trade at the European Institutions, is a platform for discussion and meetings for European and international dairy trade companies and provides an unparalleled information service for European dairy trade.
• EU
– Policy Milestones
– Soft Landing
– Current Market
– Outlook
• Global
– Supply developments
– Demand developments
• Conclusions
Dairy Market Prospects
EU Policy Milestones
• CAP reform 2003
– From market support to direct aid
– Reduction of intervention prices
• Health Check 2008
– Abolishment of Milk Quota on 1.4.2015
– Soft Landing
• Gradual expansion of milk quota from 2009 till 2014
• No expansion in final quota year
EU Policy Milestones
• Milk Package 2012
– Improve dairy producers bargaining power
• 2013 CAP reform
– Confirmation of Quota Abolishment
– No supply management in case of crisis
– Market measures only as safety net
• EU
– Policy Milestones
– Soft Landing
– Current Market
– Outlook
• Global
– Supply developments
– Demand developments
• Conclusions
Dairy Market Prospects
Soft Landing On track?
Source ZMB
Soft Landing Is quota still a factor today?
Source ZMB
Soft Landing Countries in trouble
• Austria
• Belgium
• Denmark
• Germany
• Ireland
• Luxemburg
• Poland
• The Netherlands Source ZMB
Various EU Approaches Different Milk Price Models
20 €
25 €
30 €
35 €
40 €
45 €
pri
ce p
er
10
0 k
g
Ireland
France
UK
Germany
SMP + Butter
20 €
25 €
30 €
35 €
40 €
45 €
pri
ce p
er
10
0 k
g
Ireland 0,84
France 0,55
UK 0,91
Germany 0,89
Cheddar + Whey
Various EU Approaches Different Milk Price Models
Potential
Contraction
Likely
Expansion
Soft Landing Various EU Approaches
Purchased Feed over milk price ratio
Source CNIEL
Soft Landing Milk Output Profiles
Source ZMB
• EU
– Policy Milestones
– Soft Landing
– Current Market
– Outlook
• Global
– Supply developments
– Demand developments
• Conclusions
Dairy Market Prospects
Current Market Extended Period of High Prices
Source Commission
Current EU Market
• High Milk Price
• Lower Feed Cost
• Strong Milk Production Growth
• Protein tight
• Butterfat under downward pressure
• Ireland + 50 %
• The Netherlands + more than 20 % in 5 years
• Belgium size of remaining dairy farms to double by 2020 producing 20 % more milk
• Similar claims in Germany, Denmark, Estonia,…
• UK wants to become self-sufficient by 2025 by adding 4 million tons of milk
EU Outlook A lot of strong claims
EU Outlook Commission’s Medium Term Outlook
+ 5.2% / + 6.3 %
Source Commission
• Quota elimination will not cause a revolution but – Quota abolishment appears to be slowing down growth?
– Other studies show growth pace x 2
– Recent increase in cow numbers has not been foreseen?
• Extra milk mostly destined to cheese but – Domestic consumption growth to outperform recent years
– Export continues to grow but at lower pace
• Outlook for powder not so bright but – most investments have been geared towards powders
– Over 0.5 % growth milk will have to go to powder
EU Outlook Commission’s Medium Term Outlook
EU Outlook Commission’s Medium Term Outlook
Development of production and exports 2023 (million tonnes)
Source Commission
0
100
200
300
400
500
600
2007 2008 2009 2010 2011 2012 2013*
200 176 229
376
516 520
407
EU 28 - SMP EXPORTS 1000 Tonnes
EU Outlook Is powder in trouble?
0
50
100
150
200
250
300
350
400
450
500
2007 2008 2009 2010 2011 2012 2013*
365
480 454 440
381 379 368
EU 28 - WMP EXPORTS 1000 Tonnes
EU Outlook Is powder in trouble?
0
100
200
300
400
500
600
700
800
2007 2008 2009 2010 2011 2012 2013*
589 547 569
667 673 768 791
EU 28 - CHEESE EXPORTS 1000
EU Outlook and will cheese
slowly and steadily win the race?
• EU
– Policy Milestones
– Soft Landing
– Current Market
– Outlook
• Global
– Supply developments
– Demand developments
• Conclusions
Dairy Market Prospects
Global Prospects
Source
Global Outlook Milk Production Development
Source IFCN
Global Outlook US Milk Production
Source USDA
Global Outlook NZ Milk Production
Source NZ Dairy
Global Outlook Major Exporters expanding
after weak 12 months
19,0
19,5
20,0
20,5
21,0
21,5
22,0
22,5
23,0
23,5
24,0
24,5
Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez
2011 2012 2013
Milchaufkommen wichtiger Exportländer* (Mio. t)
* Summe EU-28, USA, Neuseeland, Australien, Uruguay, Chile, Weißrussland.
© ZMBQuelle: ZMB nach nationale Statistiken.
0
100
200
300
400
500
600
700
2007 2008 2009 2010 2011 2012 2013
51 44 176
325 318 403
618
CHINA - WMP IMPORTS 1000 Tonnes
Global Outlook China Imports
40,6 75,8 89,0 89,5 64,2 67,4 57,7 46,1
175,4
325,0 319,7
402,7
617,8
17,935,0
45,0 55,442,6 62,4 40,5 55,0
70,4
88,5129,9
167,6
235,0
119,7
137,9161,1 178,0
187,5 184,5166,7
211,3
287,5
264,6
341,8
376,0
430,6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Chinas Dairy Imports('tons)
Butter / butter concentrates Cheese Whole milk powder Skim milk powder Whey powder
Global Outlook China Imports
Current Global Market Converging High Global Prices
Source Commission
• Current market conditions (high prices, low feed cost, strong export demand) favour expansion.
• The abolition of quota is likely going to result in average growth similar to that during soft landing but the ride could be bumpy.
• A shift of production to the EU dairy belt will continue and accelerate during “difficult” periods.
Conclusions
• EU demand will grow modestly absorbing on average between 0.3 and 0.5 % more milk solids per year
• Production growth above this will have to be exported
– Global demand is there
– Cheese and whey exports will continue to grow steadily
– Milk Powder & butter export growth demands competitive prices
Conclusions
Thank You
Bart Van Belleghem
Managing Director
Eucolait
www.eucolait.eu @Eucolait