Presentation to the Dairy Industry Advisory Committee June 3 4 2010 Traditional

Presentation to the dairy industry advisory committee

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Presentation to the Dairy Industry Advisory Committee June 3 - 4, 2010 Traditional exporters are slowing, while emerging sources of supply will take time to develop Note: The US and EU are both major importers and exporters of dairy products Key exporter Australia will continue to be a significant dairy exporter with a forecasted 1-3% annual increase in production through 2013, assuming better weather Production growth is limited by regular droughts that constrain herd size and water availability Domestic dairy consumption is mature and unlikely to change over the next five years New Zealand will continue to be the world’s largest dairy exporter, but production growth at current cost structure will begin to be constrained due to land availability from high prices and competing land uses Most available pasture land is already occupied by dairy, sheep, deer, or beef cattle and trend of transitioning sheep land into dairy has subsided; small number of growth oriented producers have moved to other geographies for expansion opportunities (e.g. Chile, and US) Moving to feed based dairying (local corn silage or imported grain) will increase their cost structure significantly EU is the largest dairy market in the world, but it is unlikely to grow significantly in the global trade arena Net exports are forecasted to decline ~6% annually through 2015; cheese consumption will drive dairy growth and production will see marginal increase due to productivity gains EU policy (phasing out quota in 2015, lowered export subsidies, reduced price floors) and regional market differences will drive a short-term rebalancing, but likely has limited impact on long-term global prospects for the dairy industry Poland and Romania are best poised for long-term growth, with the Netherlands, Germany and Ireland likely taking share from Italy, Spain, France and the UK during transition period Uruguay and Chile will continue to grow as low-cost exporters, but are small markets that likely will not have significant impact on the macro global trade
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Presentation to the Dairy Industry Advisory Committee June 3 - 4, 2010 Traditional exporters are slowing, while emerging sources of supply will take time to develop Note: The US and EU are both major importers and exporters of dairy products Ukraine and Belarus could become significant global exporters, but quality issues, lack of infrastructure, a destabilizing economy and currency (Ukraine), and political issues (Belarus) will slow growth on a global scale in the near- to medium-term Key exporter Brazil has recently become a net exporter and will continue to increase exports due to strong production growth Brazil likely become a significant global exporter in the long term. However, growth will be limited in speed by their infrastructure, quality issues and credit limits slowing investments Dairy growth will be different than Beef and Cash Crop growth due to location: West Central region tends toward higher profit
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  • Summer '18
  • Sagar Arora

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