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The African dairy scene

The African dairy scene. Koos Coetzee Milk Producers’ Organisation September 2014. Geographical orientation. You are here. Contents. The dark continent awakens Dairy situation in Africa Dairy situation in South Africa Challenges for dairy development in Africa. Demographics.

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The African dairy scene

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  1. The African dairy scene Koos Coetzee Milk Producers’ Organisation September 2014

  2. Geographical orientation You are here

  3. Contents • The dark continent awakens • Dairy situation in Africa • Dairy situation in South Africa • Challenges for dairy development in Africa

  4. Demographics • Population • 1,033 billion in 2013 (second highest continent) • Highest population: • Nigeria: 173,611,131 • Ethiopia: 95,045,679 • Egypt: 82,196,587 • Democratic Republic of the Congo: 67,363,365 • South Africa: 52,914,243

  5. Demographics • Population growth • 1,9 billion by 2015 • Quadruple in 90 years • Nigeria close to 1 Billion by 2100 • Possibly higher than Chinese population • Nigeria = size of Texas

  6. Demographics • Urbanisation • Largely through rural – urban migration

  7. Demographics • Young population • Sub Saharan Africa • 43% 0 – 14 • 52% 15 – 64 • EU • 16% 0 – 14 • 65% 15 – 64 • World • 26% 0 – 14 • 66% 15 - 64

  8. Income growth • Fast economic growth • Wealth concentrated in few hands • Growing food demand • Met by imports

  9. Growth of retail sector • Up to 1990 informal trade based • Supermarkets developed in SA and Kenya • By 2003 SA supermarkets were active in 13 countries • Currently: • Shoprite Checkers • 1 396 outlets in 16 countries • Masmart • 15 countries • Walmart share through investment in Masmart • Pick n Pay

  10. International involvement • Danone/ Brookside • Parmalat • Nestlé • Campina • Fonterra (CFI)

  11. Dairy farming in Africa Dairy statistics, selected African countries, 2010

  12. African dairy farming • Total production = 4,7% of world production • Deficit in 2009 = 5,5 Mil Tonnes of milk • Small dairy herds • Average herd size less than 4 • Global average less than 3 • South Africa exception 350 cows in milk • Largely subsistence farming • Low % milk to processors • Production estimates optimistic

  13. Structure of SA dairy industry • 1 830 commercial dairy farms • Many small non-commercial farmers • Milk production 2 700 million litres • Production per farm = 3 650 litres per day • Larger farms (> 5 000 litres/day produce 50% of milk • Secondary industry • 5 large and 160 other milk buyers/processors • 130 producer-distributors (distribute own milk) • Concentrated retail sector • 4 retailers handle 75%+ of total sales

  14. Structure of SA dairy sector • Products • 60% Liquid • 40% Concentrated products • Free market system • Relatively low import tariffs • Various trade agreements • No national quota systems • No pricing structure • No minimum prices • In many cases no contracts! • No subsidies

  15. Geographical distribution Source: MPO

  16. Herd size distribution Average cows in milk = 365

  17. Size distribution per province

  18. Production systems • Three production systems • Total mixed ration systems • Pasture –based systems • Mixed systems

  19. Total mixed ration systems • Feedlot or Free-stall barn • Generally larger herds • High production 35 kg + • Roughage • Maize and other silage • Lucerne (alfalfa) • Other hay • Concentrates • Maize • Soybeans • Other • Feed 350 g. to 400 g/ kg milk • Trend towards housing in barns

  20. Pasture-based system • Grass/clover mixtures • Mostly irrigated pastures • Larger herds • Production 20 kg – 25 kg • Concentrate fed in milking parlour • Maize/soybeans +other • 200 g. – 250 g. concentrate per kg milk • Individual feeding with sensors • 750 Kg MS per hectare

  21. Mixed system • Mixed farms in inland areas • Dry-land crop production • Beef/mutton/wool farming • Smaller herds • Decreasing number of producers • Pastures + feedlot + concentrates

  22. Trends • Production growth • Demand growth • Export growth • Net exporter since 2009 • Volatile producer and feed prices

  23. Milk:feed price ratio

  24. Countries’ milk price situation in 2013 Combined IFCN world milk price indicator 2013: 50.6 USD/100kg ECM

  25. Changes in population

  26. Summary • African market is growing • Global companies already active • Danger for Africa: • Reconstituting milk from solids • Dumped products disguised as food aid. • SA milk producers • Large, highly efficient • Well developed secondary industry

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