News

IDF 2015 - Update 4

Published 22 September 15

Patty Clayton, AHDB Dairy senior analyst, reports back from the seminar on Dairy Policies and Economics: Global and Regional Challenges to Economic Sustainability of the Dairy Supply Chain at the International Dairy Federation (IDF) in Vilnius, Lithuania. 

Following a presentation on recent trends in global dairy markets over the past year, Dr Hubertus-Gay of the Organisation for Economic Co-operation and Development (UK) presented the key findings from the FAO-OECD outlook. In summary, most growth in demand will occur in developing countries where there is insufficient milk production. Exports will therefore grow and become more concentrated. 

During ‘Recent Dairy Policy Developments’, the second session of the day, Kevin Bellamy, Dairy at Rabobank, presented a summary of how the dairy industry is (or can) managing price risk, including portfolio management, futures, and flexible financing among others. 

The ‘Restructuring of the Dairy Sector’ was the central theme in the third session of the day. An overview of investment activities of the top dairy companies shows two main patterns; investments tend to be made to allow access to low cost milk supplies or areas where demand growth is high. IFCN presented an overview of how their comparative data can help to identify, at both a global and national level, when farmers start responding to price trends by looking at margins over compound feed costs. 

There were also presentations on the structure of three contrasting countries. Andriy Dykun from Association of Milk Producers (Ukraine) talked about the market in Ukraine where they are contracting as a result of loss of Russian market, Marcelo Pereira de Carvalho discussed how in Brazil they are growing on back of growing incomes, while Mikhail Mishchenko explained how Russia is adjusting to structural change.