The IFCN (International Farm Comparison Network) looked at emerging markets throughout the world at its recent online Emerging Dairy Regions Forum in November 2020, with 412 participants from more than 50 countries attending. The focus was eventually on emerging markets, says Torsten Hemme, the founder and CEO of IFCN.
Below are a few key take-away points from this session.
88% of the growth in milk demand in the world has been in these emerging regions over the last 10 years. Now particularly with the pandemic, more of these areas are looking to be self-sufficient in dairy production.
From world's perspective, the average of three cows per farm globally amounts to around 850 million tonnes of milk production annually on 112 million dairy farms. 18% of world milk supply moving by international trade, while the rest is consumed in the countries where it’s produced.
On the demand side, mature markets such as Europe and North America do not have much growth occurring, while the emerging markets in East and Southeast Asia, Latin America, and even Africa are seeing increases, but from a fairly low level. The Covid-19 is expected to have more of an impact on emerging markets.
Besides India, countries like Brazil, China, US and the EU increased milk production substantially. Contrary to this, in countries such as Australia, Japan and Russia, milk production is declining. “It is very easy to destroy a dairy sector, but very difficult to rebuild it.” With the growing population and similar growth of per capita demand until 2040, it is likely that demand will increase faster than supply.
For newly emerging dairy exporting countries, such as Uruguay, the main challenge is to improve its market access to other countries’ markets. "We need more trade agreements to put our dairy market in the same situation as our competitors such as New Zealand and the US. The worry is in the second wave of Covid-19, countries are building stocks.”
Alternative milk is gaining popularity, especially in the developed regions of the world where consumers are demanding new types of “milk” while emphasizing less on the proven nutritional benefits of dairy milk. “Sales of plant-based drinks are growing fast both in value and volume but so far, they remain a small market portion. In 2018, they represented 4% share on cow milk volume sales.” IFCN estimates that animal based dairy products will outlive alternative kinds of “milk”. Nevertheless, in order to shape this process, the dairy sector needs to develop and make serious efforts to cope with the requirements of future consumers.
