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Canadian Dairy Market - An Overview

Canadian Dairy Market - An Overview. Global Dairy. World Largest Producers. - Million Tons - Calendar Year 2004. Canadian Dairy at a glance. Canadian milk renowned for excellence Quality Standards in farms & processing plants

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Canadian Dairy Market - An Overview

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  1. Canadian Dairy Market - An Overview

  2. Global Dairy

  3. World Largest Producers - Million Tons - Calendar Year 2004

  4. Canadian Dairy at a glance • Canadian milk renowned for excellence Quality Standards in farms & processing plants • in 2005, dairy production generated farm receipts of $ 4.8 Billion • Dairy industry ranks fourth in the agriculture sector • About 81% of farms located in Ontario and Quebec, 13% Western, 6% Atlantic • Dairy population 1,546,300 heads (approx. 1,048,600 dairy cows (Jan’06 est.) • Typical Canadian farm has 60 cows • Nearly 38,000 people work on dairy farms, 26,000 primary processing • Canadian dairy works under Supply Management System • Planned domestic production • Administered pricing • Dairy product import controls • In 2005, approx. 463 dairy processing plants (295 Federally inspected plants)

  5. 38 % 9 % 8 % 1 % 33 % 3 % 4 % 2 % 2 % …. At a glance Production 2004/0575,237,235 Hectolitres Dairy Cash Receipts (2005)$ 4,841,686,000 Number of farms with shipments of milk or cream (Jul 05)16,224 Dairy Cows (Jan 05)1,006,400 Dairy Heifers (Jan 05)498,600

  6. …. At a glance • Canadian dairy famous for superior genetic quality of its cattle herd • Live dairy cattle exports for breeding to NA, EU and Asia Pacific • Canadian cows enrolled on official milk recording • Produce average of 9,442 Kg of milk per cow (305 days lactation) • Canadian milk has an average content 3.21% protein & 3.76% fat • The Holstein is most common dairy breed (93% of dairy herd) • OIE standards are being put in place • Processing of Dairy Products • Fluid milk market (table & fresh cream ) represents 38% of milk production(28.3 M Hect Ltr) • Manufactured dairy products butter,cheese, yogurt & IC accounts 62%(6.5 M hectolitres) • Processing sector is concentrated • 16% plants owned by 3 large processors Saputo, Agropur, Parmalat • Process approx. 70% of the milk produced

  7. …. At a glance • Quality & Safety • Government & various partners closely coordinate movement - “Farm to consumer” • Dairy Farmers of Canada (DFC), Dairy Processors Association of Canada (DPAC) • The Canadian dairy commission (CDC), Provincial Marketing Boards • Agriculture and Agri-Food Canada (AAFC) , Canadian dairy industry • Canadian Dairy Commission (CDC) supports the industry • Implement National policies • Assessing changes in demand for milk and dairy products • Production of milk • Coordinating the pooling of milk revenue and market sharing system • Canadian Food Inspection Agency (CFIA) responsible for • Setting standards for dairy products • Plant inspections • Regulating packaging and labelling • Enforces veterinary health programs • Ensure safety of dairy products

  8. International Trade • In 2005, Canada exported • Cheeses 27.1% • Dairy spreads 18% • Ice cream 16 % • Major markets for dairy • United States 48.1% • EU 12.9% (UK 12.9%) • Canadian dairy exports 2005 $ 242.6 Million imports 597.6 Million • Major Imports • Cheeses 29.2% • Casein and derivatives 18.3% • Butter and fats & oils 11.6% • Whole milk powder 10.6 % • Our major suppliers • EU-25 38.6% • New Zealand 23.9% • United States 22.8%

  9. Historical Production 2000-2005 (Marketing Year) 000 Hectolitres / Annum

  10. Farm Input Price Index 1999-2003 1992 = 100

  11. Dairy Cows & Heifers by Key Provinces

  12. Breeds & Average Production - Nationwide Yearly Production – 2005 basis

  13. Average Raw Milk Yield per Cow CountryKgs / Year Canada 9,500 United States 8,235 Japan 7,400 European Union 6,000 Australia 4,906 New Zealand 3,700 Mexico 1,397 2003 Comparison

  14. Dairy Products Production Possibilities

  15. Milk Utilization per Class Class 1 Fluid milk, Fluid cream & Milk-based beverages Class 2Yogurt, Sour cream & Ice-cream Class 3 Speciality cheese & Cheddar Class 4 a,b,c,dButter, Butteroil, Powders, Concentrated milk & unclassified products Class 4 m Marginal markets Class 5 a, b,cSpecial classes – Dairy ingredients Class 5 dSpecial classes – Planned exports and other exports

  16. Milk Components Content kg / hl

  17. Fluid Milk Sales - Canada 000 Litres

  18. Day to day Challenges to Dairy Purchasing • Closely Monitor Production • Ensure Food safety • Maintain a close tab on type of Cows & yields by type • Support prices • Other influencing factors to the dairy market • Farm income • Herds average age – cows on feed • Quality of milk – buying discount • Milk processing costs etc • An eye over the industry future developments • Milk collection centers performance • Seasonality impacts , weather • Logistics / avoid transit losses • Innovation support • Environmental protection • Long-term contracts • Strategic partnering to ensure sustained supply and desired quality • Industry regulations and developments • Key competition for Nestle / Key players??? • Stay on top to meet or beat above Challenges

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