world dairy outlook€¦ · presentation outline. dairy farmers of canada. 1. canadian dairy...
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World Dairy Outlook
DAIRY FARMERS OF CANADA
Annual Policy ConferenceFebruary 2018
PRESENTATION OUTLINE
DAIRY FARMERS OF CANADA
1. Canadian Dairy Industry Statistics (2017)
2. The World Dairy Market in 2017
3. 2018 Market Outlook
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1. INDUSTRY PROFILE
DAIRY FARMERS OF CANADA
10, 951- 3.0 %
Number of Farms
2017 dataSources: Canadian Dairy Information Centre, Statistics Canada, 2017
37 M+ 1.3 %
Canadian Population
86+ 4.7 %
Avg. Cows per Farm
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1. INDUSTRY PROFILE
DAIRY FARMERS OF CANADA
+11 %Cream
+3 %Cheese
+7 %Butter
Total Consumption figures, Percentage change 12 month data ending October 2017
Source: Statistics Canada, Canadian Dairy Commission
-2 %Fluid Milk
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1. INDUSTRY STATISTICS
DAIRY FARMERS OF CANADA
$7.1 B+ 6.4 %
Total Revenue
8.9B L+ 6.0 %
Total Production
12-month data ending November 2017Sources: Canadian Dairy Commission
$79.28+ 0.4%
Avg Farm Gate Return
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1. INDUSTRY PROFILE
DAIRY FARMERS OF CANADA
$3.8B+25%
In Tax Revenues
221K+3%
Canadian Jobs
$19.9B+31%
To Canada’s GDP
2015 data% change: 2015 vs 2009Source: EcoRessources
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2. International Market
DAIRY FARMERS OF CANADA
IFCN Milk Price Indicator- Theoretical price of milk assuming world
prices, and standard operating costs
- Significant price drop 2014 2016- Early 2017: better than expected
production, trade uncertainty, etc.- Mid 2017: increased trade, high demand- Late 2017: over-production, high stocks
The IFCN indicator is the weighted average of 3 indicators: SMP & butter (35%), Cheese & whey (45%), WMP (20%)
ECM = 4.0% fat; 3.3% protein
$31.90
$40.74
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
$65.00
2014
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2014
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2014
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2014
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2014
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2014
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2015
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2015
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2015
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2015
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2015
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2015
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2016
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2016
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2016
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2016
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2016
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2016
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2017
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2017
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2017
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2017
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2017
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2017
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USD/100 kg ECM CAD/100 kg ECM7
2. International Market
Source: Average Oceania price, USDA AMS 8
DAIRY FARMERS OF CANADASources: CDC, USDA, DCANZ, Eurostats, Statistics Canada (exch. Rate)
Figures presented in natural composition.
Volatility in Gross Revenues per HL by Region (Jan 2014 Price =100)
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IMPORTS & EXPORTS DASHBOARDImports (All dairy / All countries) Exports (All dairy / All countries)
Source: Statistics Canada 10
DAIRY FARMERS OF CANADAAll milk in Canada is rbST FreeFresh milk = Pasteurized fresh milk (i.e. does not include UHT milk)Source: Nielsen Fresh Milk Price Report (2017)
Global Retail Fresh Milk Price 12-months ending October 2017 ($CAD/L)
$0.88 $0.99 $1.00
$1.12 $1.15 $1.23 $1.23
$1.50 $1.57
$1.64 $1.77 $1.83
$2.21
$2.58
$2.74
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Poland GreatBritain
Mexico USA Russia Germany SouthAfrica
Canada Australia USA -rbST free
France NewZealand
Vietnam China Norway
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DAIRY FARMERS OF CANADA
Retail Price of Beverages Comparison: Canada12-month period ending October 2017 ($CAD/L)
Exchange Rate: 1.3101 USD/CADSource: Nielsen (2017)
$0.92
$1.50 $1.51 $1.96
$2.18 $2.23 $2.28
$2.84 $3.23
$6.33
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
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DAIRY FARMERS OF CANADA
$1.51
$9.34
$13.98$13.64
$4.09
$4.97
$1.27
$10.77
$14.81$14.27
$4.27
$6.62
$1.64
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
MILK* BUTTER NATURAL PREPACKAGEDCHEDDAR
NATURAL PREPACKAGEDMOZZARELLA
CREAM YOGURT EXCL. FROZENYOGURT
Retail Price Comparison: Canada-US12-month period ending October 2017 ($CAD/kg/l)
CANADA UNITED STATES (CAD) UNITED STATES (rbST Free milk)*All milk in Canada is rbST FreeExchange Rate: 1.3101 USD/CAD
Source: Nielsen (2017)12
2. World MarketRegion 2017 Market Developments
Canada- Supply management- Strong demand for BF- CETA, CPTPP, NAFTA 2.0
USA
- Over-production- Dumping of milk (Michigan, NE)- Strong domestic demand for BF- NAFTA 2.0
Europe
- Over-production- SMP Intervention Stocks (380,000 tonnes)- Voluntary Production Reduction Programme (CAP)- CETA, EU-Japan Free Trade Agreement
Oceania - Aggressive environmental commitments- Concessional loan programs
China - Increase in dairy imports (versus 2016)- Slashing tariffs on US dairy products
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3. 2018 Market Outlook
DAIRY FARMERS OF CANADA
Domestic
Positives
- Strong market growth
- Increased investment
Challenges
- CETA, CPTPP, NAFTA 2.0
- Government of Canada’s “Healthy Eating Strategy”
International
- BF: Strong production & stocks
- SNF: Rising stocks of NDM (US), EU SMP stocks
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THANK YOU
DAIRY FARMERS OF CANADA