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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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World Largest Producers - Million Tons - Calendar Year 2004
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)
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
…. 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
…. 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
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%
Historical Production 2000-2005 (Marketing Year) 000 Hectolitres / Annum
Farm Input Price Index 1999-2003 1992 = 100
Breeds & Average Production - Nationwide Yearly Production – 2005 basis
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
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
Milk Components Content kg / hl
Fluid Milk Sales - Canada 000 Litres
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