Written by Brian McDonnell
During the Alltech ONE event, Dr. Torsten Hemme, the CEO and founder of the International Farm Comparison Network (IFCN) – gave a presentation on current global milk production and market trends.
He also spoke about the prices farmers can expect in 2021 and opportunities that exist in the global milk trade.
Dairy story
Dr. Hemme began by outlining the current dairy trends and production, he stated that: ”On average, a person is consuming 0.3L per day or 118kg of milk/person/year and that annually, dairy products are consumed by over seven billion people.
Dr. Hemme stated that: ”The dairy story is not told well enough; the top 20 dairy processors contribute $103 billion to the global economy each year.
”$71 billion of this is paid to dairy farmers in milk cheques and $21 billion is paid to employees of these companies.”
Image source: Alltech One event
Markets
Dr. Hemme then answered the question of dairy market trends – are dairy markets under threat from dairy alternatives, vegans, low GDP and Covid-19?
Measuring dairy demand to separate myth from truth, he stated that: ”The trend for dairy demand is strong, with a 2.3% or 16 million t/year increase expected.
”The demand for dairy products continues to grow due to increasing global population, although liquid milk consumption may be decreasing – the demand for cheese and butter is out performing this reduction.”
Milk/feed prices and margins
Dr. Hemme then spoke about milk prices, feed prices and margins on dairy farms; he stated: ”We have seen feed prices increasing, but globally the price of milk has also increased, meaning in many cases the increased feed costs are offset by the increased milk price.
It is important to note that this applies to farmers that are receiving the price based off world milk price and feed prices.
Dr. Hemme then stated that: ”In general, grazing farms are performing better due to better feed cost compared to housed systems, where feed cost continues to increase.
”With countries like New Zealand benefiting from this, while the system operated in the U.S suffers.”
Price outlook
Looking at the trends in global milk prices, Dr. Hemme said: ”The good news is that prices should continue to rise over the next three to four months.
Dr. Hemme did note that: ”Farmers should monitor the time-lag between world dairy prices increases and prices being paid by national co-ops.”
Opportunities
Finally, looking at opportunities for the sector, he stated: ”The price for 2021 is expected to be $40/100kg of milk.
”By 2050 the global dairy sector is expecting a 50% increase in demand, but farms must focus on reducing emissions and maintaining trust with consumers.”
Image source: Alltech One event
The post Alltech ONE: ‘The dairy story is not told well enough’ appeared first on Agriland.co.uk.
Continue reading on the Agriland Website...
