IFCN says milk demand will grow faster than supply

IFCN Dairy Research Network presented data and outlooks for the future dairy markets and milk price development at its recent annual conference. After the last world milk price crisis in 2016, farm gate milk prices have stabilised during the last two years on a level of US$35/100 kg (€30/100kg). IFCN predicts further milk price stabilisation as milk demand is growing faster than milk supply at current world milk price.

The 16th IFCN Supporter Conference was held in Parma, Italy, 11-13 September. This event has become the leading global think tank for the dairy sector and a knowledge exchange platform for dairy related companies. This year 120 participants from over 80 companies focussed on the global dairy perspectives 2030 and the theme of, How will Big Data change dairy farming and the Supply Chain in the future?.

Big data in agriculture describes large sets of data that are generated on farms. It is becoming more important due to increasing use of emerging technologies that create data, such as sensors and cameras. However, simply storing the data provides little value. As seen in different conference presentations data becomes advantageous when it is analysed computationally to reveal patterns, trends, and associations, especially relating to behaviour and interactions. All this data, combined with advanced data platforms, can create new value for cows, farmers, processors and consumers. Insights that can enhance animal productivity and comfort while also driving incremental value and transparency across the dairy supply chain were discussed. “We are entering in a new era, when technology application, precision and cost are getting to a situation where multiple sources of information and insights will be integrated, correlated and analysed to solve complex problems in a timely manner”, explains Ricardo Daura, global product line director for digital insights at Cargill.

Presenting its long-term and short-term outlooks, IFCN showed that milk demand growth until 2030 is estimated at 304 million tons, which represents three times the current US production. To activate the production needed for this growth, a world milk price of more than US$40/100 kg is required. The dairy market situation in 2019 will be heavily impacted by the situations observed in 2018 like weather anomalies impacting feed production, dairy import demand and GDP growth per capita. A rapid slowdown of world milk supply growth reaching around 1.6% in August versus 3.1% in January has supported the price stabilisation of US$35/100 kg.

A key driver for the supply reaction was deterioration of dairy farm economics situation and sever regional weather anomalies. Torsten Hemme, managing director of IFCN sums up, “The dairy demand will grow faster than the supply. IT solutions for big data will serve the dairy chain in order to identify the growth potentials of this sector. The IFCN Supporter Conference created the opportunity for the dairy industry to meet new technologies ventures, leverage existing learnings and discover what digital disruption means to the industry and to each of the stakeholder along the dairy supply chain.”

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