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Annual National Workshop for Dairy Economists and Policy Analysts

Annual National Workshop for Dairy Economists and Policy Analysts Session II: International Markets and Policy Developments and Status of European Dairy Markets Véronique Pilet , CNIEL, France Boston, May 13 & 14 2013. Recent developments in the world.

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Annual National Workshop for Dairy Economists and Policy Analysts

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  1. Annual National Workshop for Dairy Economists and Policy Analysts Session II: International Markets and Policy Developments and Status of European Dairy Markets Véronique Pilet, CNIEL, France Boston, May 13 & 14 2013

  2. Recent developments in the world

  3. World dairy production (all categories included) Geographic breakdown of world milk production in 2012 (million tonnes) Europe 219 29% EU-27 159 Russia 32 Ukraine 11 Belarus 7 N. America 99 13% United States 90 Canada 8 Asia 282 37% India 132 China 45 Pakistan 33 Turkey 17 Central America 17 2% Mexico 11 Africa 39 5% Sudan 8 Egypt 6 Kenya 4 S. America 71 9% Brazil 33 Argentina 12 Colombia 8 Oceania 29 4% New Zealand 20 Australia 9 World total: 760 million tonnes FAO Food Outlook November 2012, IDF-DCANZ for NZ

  4. Asia still biggest contributor to milk output increase Evolution of dairy production (all categories included) 2007 to 2012 North & Central America + 6 Mt Europe + 6 Mt Asia + 44 Mt Africa + 8 Mt South America + 15 Mt Oceania + 4 Mt World averageannualgrowth rate + 2.4% World total: + 84 million tonnes CNIEL / IDF, FAO Food Outlook Mt: million tonnes

  5. Growth dynamics in main dairy producing countries (1/2) CNIEL / FAO Food Outlook

  6. Growth dynamics in main dairy producing countries (1/2) CNIEL / FAO Food Outlook

  7. Growth dynamics in main dairy producing countries – rolling 12 month basis NB : deliveries in Europe and Japan CNIEL / USDA, ZMB, PZ, Alimentosargentinos, DCANZ, Dairy Australia

  8. Geographical variations of dairy product consumption Apparent dairy product consumption levels in 2012(kg per capita) Canada 242 Russia 245 EU 287 USA 276 Japan 71 China 38 Iran 90 Algeria 153 India 105 Mexico 108 Philippines 10 Brazil 173 World average: 108 kg/capita Indonesia 13 Australia 309 Lessthan 50 kg 100 to 200 kg Argentina 237 50 to 100 kg More than200 kg CNIEL / IDF, FAO Food Outlook, PRB

  9. Geographical variations of dairy product consumption Apparent per capita consumption (kg – in milkequivalent) CNIEL / IDF, FAO Food Outlook, PRB

  10. Income and dairyconsumption in the BRIC countries NB : Humanconsumption of dairyproducts, butter excluded, in milkequivalent ; losses and dairyused as animal feedexcluded. CNIEL / FAOSTAT, FMI

  11. Demand is sustained on main markets Recent import tendencies on substantial markets Russia Import* 2 months2013 / 12 months2012 Butter :+ 60% /- 8% Cheese: + 12% / + 7% United States Import January2013 / 12 months2012 Cheese: - 1%/+ 8% Caseins: + 15% /-3% Japan Import 2 months2013 / 12 months2012 Cheese: + 1% /+ 9% China Import 2 months2013 / 12 months2012 SMP : - 34% / + 29% WMP : + 50% / + 27% Whey: - 6% / + 10% Brazil Import 2 months2013 / 12 months2012 WMP: - 37% / + 29% Cheese: - 22% /- 29% Algeria Import 11 months2012 SMP: - 12% WMP: - 8% *Russian imports do not account for volumes originating from Belarus NB: Evolution of imports based on volume CNIEL / Ubifrance, national customs

  12. Presence on the world market Recent export tendencies among major suppliers of the world market EU - 27 Exports 12 months in 2012 Skim milk powder: +1% Whole milk powder: -1% Butter: +8% Cheese: +14% Whey: +7% United States Export January2013 / 12 months2012 SMP: - 19% /+ 2% Cheese: + 13% /+ 16% New Zealand Export 2 months2013 / 12 months2012 SMP: + 17% / + 9% WMP: + 21% / + 15% Butter : - 14% / + 8% Butter oil : + 26% / + 33% Cheese: + 17% / + 25% Argentina Export January 2013 /12 months2012 WMP: - 27% /- 1% Cheese: - 10% /- 10% Australia Export January2013 / 12 months 2012 SMP: + 4%/+ 21% WMP: - 54% /- 3% Cheese: + 5%/stable NB: Evolution of exports on a volume basis CNIEL / USDA, Dairy Australia, Commission, ZMB, Ubifrance, national customs

  13. Global dairyproducttrade Global trade structuration of DairyProducts in 2012* (in milkequivalent – FAO methodology) 53 million tonnes 7% of global production Main supplying countries (%) Main markets(%) New Zealand 32 China12 European Union24 Russia6 United States 10 SaudiArabia 6 Australia6 Mexico 5 Argentina 4 Algeria5 Belarus 4 Indonesia 3 Top 2 : 56 % Top 5 : 76 % * Except intra-EU trade Top 2 : 18 % Top 5 : 34 % CNIEL / FAO

  14. World market prices booming FOB price in Oceania US$ 1,000 / tonne up until April 2013 CNIEL / USDA

  15. Farmgate milk prices throughout the world… NB: fat and protein content referencesdifferfrom one country to another. CNIEL, Alimentosargentinos, ZMB, USDA, China Dairy

  16. …Absorbed by high input prices Eurostat, USDA, CLAL

  17. Stocks of dairy products are unavailable Evolution of European butter and SMP stocks up untilMarch 2013 CNIEL / EU Commission

  18. European Markets

  19. Cow’smilkdeliveries Year 2012 Total EU 27 : 140,7 million tonnes 2,3 2,9 0,7 4,9 0,7 1,4 11,7 5,4 13,6 9,8 30,2 3,3 2,4 0,3 0,9 More than 15 million tonnes 3,0 24,5 1,4 0,5 0,9 5 to 15 10,9 1 to 5 0,5 1,9 6,0 Lessthan 1 0,7 0,2 (Cyprus) 0,04 (Malta) Cniel / Eurostat, ZMB

  20. Ireland, Germany, Netherlands &France mostdynamic countries Evolution of milkdeliveriesbetween 2007 and 2012 Strong ambition to grow: Ireland(+ 50% between 2010 and 2020) Germany(+ 10 Mt within10-15 years) The Netherlands(+ 1 Mt after the end of quotas for FrieslandCampina) Austria(+ 25% after the end of quotas ) …. +6,0% Strongprogress(> 5%) Moderateprogress(0 to 5%) +8,3% +6,4 % +1,2% Moderatedecline(0 to -5%) +7,4% +6,0% -3,2% Strongdecline(< -5%) -16% -11% +7,1% -22% - 0,1% -34% +4,1% Cyprus Cniel / Eurostat, ZMB

  21. Quota utilisation Ireland, the Netherlands and Germany are for nowlimited by quotas. France isreacting (or used to react) differently. Cniel / European Commission

  22. Under-use and excess of milk quotas in Europe Situation by member state in 2011/12 Excess Significantunder-use (3 à 6%) Considerableunder-use (> 6%) Limited under-use (< 3%) Cyprus Malta

  23. Amplifiedvolatility on global marketsfindsitswayto Europeaninternalmarkets NB : Europeanquotationsmeasured in France CNIEL / FranceAgriMer, ZMB

  24. Implementation of the Milk Package • Milk Package Reg. 1234/2007 (Single CMO) as amended by EuropeanParliament Reg. 261/2012 with a specific part on « milk and dairyproducts ». Adopted 14th March 2012 – application 2nd April 2012 until2020 Main aspects: • Contractualrelations between a milkproducer and his client canbespecified in writing • Negotiating power : possibility to create Producers Organisations(or PO Associations) with or without transfer of ownership – no change for existing cooperatives which keep their status • Max. size : 3,5% of EU milk i.e. 5 billion litres • POs must be declared to the Member State • Transparency : processors must declare to the Member State the collected volumes eachmonth • Inter-branchorganisations (IBO) canberecognised by Member States • PDO/PGI cheese supply regulation allowed

  25. CAP reshapingprocess 2013-2020 • A greener CAP • 30% of subsidies linkedwithenvironmentalmeasures • A fairersubsidy distribution • Single payment per hectare per member state • Moderaterebalancing of national envelopes • Capping of payments per farm • Targeting of support to active farmersonly • More funds for youngfarmers and smallproducers • More competitiveness to guaranteefoodsecurity • Emergency measures in case of a crisis: intervention, mutualfunds • Rural development support jointly funded by the Community and Member States • Simplerprocedures

  26. Evolution of CAP expenditure (1980 – 2020) Notes: - 2011 = Budget; 2012 = Budget prévisionnel; - 2013 = Sous plafonds FEAGA pour paiements direct et dépenses de soutien des marchés + engagements pilier 2. Les montants développement rural 2013 inclus la modulation volontaire UK et Article 136 “montants non dépensés”. Comme ceux-ci s’arrêtent fin 2013, les montants correspondant sont intégrés dans les aides directes à partir de 2014. DG AGRI

  27. CONCLUSION • Dairy Europe and its multiple faces • A regionpresent on the global marketshowing a potential for growth… • …but facing a number of uncertainties: • A new volatility, • The end of the quotas, • Reform of dairypolicieswithdifferent impacts according to the zones

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