IFCN Dairy Report 2012 (Extract - 17 pages)

Dairy Report 2012
For a better
understanding of
milk production
world-wide
IFCN
International Farm
Comparison Network
Extract

© IFCN Dairy Report 2012
Dear friends,
It is a pleasure for us to summarise
the highlights of our research and
network activities in 2012.
The IFCN Mission
When looking at the dairy chain as a whole, the majority of costs,
resources used, emissions generated and political challenges fall
in the milk production segment. That is why the IFCN work is driven
by our mission:
We create a better understanding of
milk production worldwide
Status of the network in 2012
A milk production profi le was created for 91 countries, representing
about 97.5% of the world’s milk production. In the farm
comparison 171 typical farms from 61 dairy regions (51 countries)
were analysed. We are very happy to welcome the countries / regions
Colombia, Costa Rica and Ethiopia, Mongolia, Turkey, and US-
California in the IFCN work. Signifi cant progress has been made in
Australia, India, Iran, Mexico, and USA.
Highlights 2012
IFCN Dairy Conference 2012: With 47 countries participating we
have made signifi cant progress in representing world milk production.
2011 – A dairy year of new records
In 2011 milk production grew by 22 million t which was the highest
growth ever observed. Relatively high milk and beef prices have
led to good farm economic results in most dairy countries.
IFCN method work has focused on
• ECM milk standardising formula
• Milk quality diff erences of farms
• Analysis of milk collection costs
• Variation of interest rates between countries
• The IFCN world milk price indicator
Concentration of milk processing: The analysis of the top 10 milk
processors permits an overview on the concentration of milk processing
per country and also a benchmarking between countries
Feeding systems: With rising feed prices it has become more and
more important to understand and improve feeding systems. In
2012 IFCN has made a signifi cant step forward in this fi eld.
The IFCN Supporter Conference 2012: This conference was held
in Cork, Ireland, 17th to 19th September with the Irish Dairy Industries
Association acting as host.
Institutional partners
of the IFCN Dairy Network
International
Dairy
Federation
Introduction
IFCN Dairy Report 2012
Chapter 1: Cost comparison: This chapter summarises results
on costs, returns, profi tability and productivity of dairy farms
worldwide.
Chapter 2: Global monitoring: This chapter gives a broad
monitoring on specifi c dairy issues such as milk prices, feed
prices and milk : feed price ratio.
Chapter 3: Milk production fact sheets: This profi le, prepared
for 91 countries, gives a comparable overview related to:
• Milk supply and demand developments
• Monthly milk prices and production data
• Consumer prices and margins in the chain
• A list of 10 major processors.
Moreover, the key results are summarised at the beginning of
the chapter via world maps.
Chapter 4: Special studies: This chapter summarises special
studies on method issues and other important studies performed.
A word of thanks
We would like to extend our heartiest thanks to all our scientifi
c partners, agribusiness partners, our institutional partners
and also to the people working in the IFCN Dairy Research
Center. It was a pleasure to serve the network in 2012 and we
are looking forward to our activities in 2013.
Although growth and profi tability were mainly good in 2011
we already now know that great changes during 2012 have
infl uenced our business and make our continued work important
to monitor and understand our dynamic environment.
Torsten Hemme Anders Fagerberg
Managing Director Chairman of the IFCN Board
1

Participating dairy economists / co-editors of the IFCN Dairy Report
Djellali Abderrazak
Horizons Agro-alimentaires Boufarik,
Algeria
2
Dairy Expert
Hugo Quattrochi |
Unión Productores de Leche Cuenca
Mar y Sierras, Argentina
Vardan Urutyan, Arpine Arakelyan |
International Center for Agribusiness
Research and Education (ICARE),
Yerevan, Armenia
Jon Hauser | Xcheque Pty Ltd, Glen
Alvie, Victoria, Australia
Leopold Kirner | Federal Institute
of Agricultural Economics, Vienna,
Austria
Mohammad Uddin | IFCN Dairy
Research Center, Kiel, Germany,
Bangladesh
Институт системны х исследованийв АПК
Национальной академии наук Беларуси
Anatoli Takun, Sviatlana Takun |
Institute of System Research in
Agro-industrial Complex, Minsk,
Belarus
Erwin Wauters | Institute for
Agricultural and Fisheries Research,
Merelbeke, Belgium
Henrique C. Junquieira | Cooperativa
Agropecuária Castrolanda, Castro,
Paraná, Brazil
Lorildo A. Stock | Embrapa Gado de
Leite (Embrapa Dairy Cattle), Juiz de
Fora, Minas Gerais, Brazil
Henri Bayemi, Asaah Ndambi |
Institute of Agricultural Research
for Development (IRAD) Bambui,
Cameroon; IFCN Dairy Research
Center, Kiel, Germany
Steve Couture | Dairy Farmers
of Canada, Ottawa, Canada
Mario E. Olivares |
Cooprinsem, Osorno, Chile
Sam Shi | Dairy Consultant, Beijing,
China
Enrique Ortega | DMV U.N., CNLM,
Colombia
Iveta Bošková | ÚZEI – Research
Institute of Agricultural Economics
and Information, Prague,
Czech Republic
Susanne Clausen | Knowledge Center
for Agriculture, Aarhus, Denmark
Adel Khattab | Tanta University,
Faculty of Agriculture, Animal
production department, Tanta, Egypt
Zelalem Yilma | Heifer International,
Addis Ababa, Ethiopia
Sami Ovaska, Jukka Tauriainen;
Timo Sipiläinen; Matti Ryhänen
| MTT Economic Research, Helsinki;
University of Helsinki, Helsinki;
Seinäjoki University of Applied
Sciences, Seinäjoki, Finland
Jean-Luc Reuillon | Institut de
l’Èlevage, Département Actions
Régionales, Aubière, France
Dorothee Boelling | IFCN Dairy
Research Center, Kiel, Germany
Annett Rindfl eisch, Ingo Heber |
Sächsisches Landesamt für Umwelt,
Landwirtschaft und Geologie, Dresden,
Germany
TN Datta, AK Saha, GG Shah |
National Dairy Development Board,
Anand, India
Devi Prasad Rao | Arohana Dairy
Private Limited, Vallam, Tamil Nadu,
India
Bambang Ali Nugroho | Faculty
of Animal Husbandry, University of
Brawijaya (UB), Malang, East Java,
Indonesia
Farhad Mirzaei | Animal Science
Research Institute of Iran, Karaj, Iran
Massoumeh Nasrollahzadeh | IFCN
Dairy Research Center, Kiel, Germany,
Iran
Fiona Thorne | Rural Economy
Research Centre, Teagasc, Dublin,
Ireland
Liron Tamir | Israel Dairy Board,
Rishon-Le´Zion, Israel
Alberto Menghi | CRPA – Centro
Ricerche Produzioni Animali, Reggio
Emilia, Italy
Dairy Research Center
Othman Alqaisi | IFCN Dairy Research
Center, Kiel, Germany, Jordan
Simone Adam | Ministère de
l’Agriculture, Service d’Economie
Rurale, Luxembourg
Enrique Vazquez | Universidad
Veracruzana, Mexico
Rigoberto Becerra Pinedo | Establo
Gibraltar, Durango, Mexico
Btissam Kessab | Centrale Laitière,
Casablanca, Morocco
Nicola Shadbolt | College of Sciences,
Massey University, Palmerston North,
New Zealand
Isah Annatte | Livestock and Fisheries
Program, NAERLS/ABU, PMB 1067, Zaria,
Nigeria
Ola Flaten, Bjørn Gunnar Hansen |
NILF – Norwegian Agricultural
Economics Research Institute; TINE,
Norwegian Dairies, Oslo, Norway
Haroon Lodhi | Waseem Shaukat,
Solve Agri Pak (Private) Limited, Lahore,
Pakistan
© IFCN Dairy Report 2012

Carlos A. Gomez | Universidad
Nacional Agraria La Molina, Lima, Peru
Michał Switłyk, Ewa Kołoszycz |
West Pomeranian University of
Technology in Szczecin, Department
of Management, Szczecin, Poland
Evgeny Kuplyauskas | Russian Dairy
Union, Moscow, Russian Federation
Rade Popovic | University of Novi Sad,
Faculty of Economics, Subotica, Serbia
Koos Coetzee | Milk Producers‘
Organisation, Pretoria, South Africa
Ernesto Reyes | TRAGSATEC – Ministerio
del Medio Ambiente, Medio Rural y
Marino, Spain
Agneta Hjellström | Swedish Dairy
Association, Stockholm, Sweden
Christian Gazzarin | Agroscope
Reckenholz-Tänikon Research Station
(ART), Agricultural Economics, Tänikon,
Switzerland
Michel de Haan | Animal Sciences
Group, Wageningen-UR, Lelystad,
The Netherlands
Dhiaeddine M‘Hamed | Centrale
Laitière du Cap-Bon Délice, Saliman,
Tunisia
© IFCN Dairy Report 2012
Participating dairy economists / co-editors of the IFCN Dairy Report
Muhittin Özder |Turkish Milk Council,
Ankara, Turkey
Olga Kozak | National Scientifi c Centre
“Institute of Agrarian Economics”, Kyiv,
Ukraine
Karolina Klaskova | Agriculture &
Horticulture Development Board,
Market Intelligence, Kenilworth,
Warwickshire, United Kingdom
Chad Harris | Glanbia, Idaho, USA
Ed Jesse | Babcock Institute,
University of Wisconsin, USA
William Schiek | Mike Francesconi,
Annie AcMoody | Dairy Institute of
California; California Department of
Agriculture; Western United Dairymen;
California, USA
Bill Zweigbaum, Christopher Noble |
Farm Credit East, Greenwich, NY,
USA; Linwood Management Group,
Linwood, NY, USA
Gabriel Bagnato | Instituto Nacional
de la Leche, Montevideo, Uruguay
Researchers participating only in the
country profi le analysis
Ilir Kapaj | Hohenheim University,
Stuttgart, Germany, Albania
Andrew Weinert | Department of
Agriculture, Perth, Australia
Felix Menzel | Dairy Farmer, Mezza
Sucre, Bolivia
Zlatan Vassilev | Dairy Expert, Bulgaria
Douming, Wennie Liu | Beijing Orient
Dairy Consultants Ltd, China
René A. Pérez R., Luisa Fernanda
Quiceno | DMV U.N., CNLM, Colombia
Francisco Jose Arias Cordero |
Dos Pinos, Costa Rica
Jasmina Havranek | Faculty of Agriculture,
University of Zagreb, Croatia
Rafael Vizcarra | Centro de la Industria
Láctea, Quito, Ecuador
Katri Kall | Estonian University of Life
Sciences, Estonia
Eva Schröer-Merker | IFCN Dairy
Research Center, Kiel, Germany
Daniel Mándi-Nagy | Research
Institute for Agricultural Economics
(AKI), Budapest, Hungary
Baldur H. Benjamínsson | Association
of Icelandic Dairy and Beef Cattle
Farmers, Reykjavik, Iceland
Dr. A. K. Srivastava, Smita Sirohi |
National Dairy Research lnstitute,
Karnal, India
Istiqomah | Fakultas Ekonomi Universitas,
Jenderal Soedirman Purwokerto
Central, Java, Indonesia
Hamid Monazami | Ganje Kavir. Co,
Mashhad,, Iran
Kenji Namiki | Japan Dairy Council,
Tokyo, Japan
Galiya Akimbekova | Scientifi c
Research Institute of Agricultural
Economics, Almaty, Kazakhstan
David Waititu Kimani | TechnoServe,
Nairobi, Kenya
Lee Jung Min | Korea Rural Economic
Institute, Seoul, Korea
Almasbek Chonov | Project DGRV
(Deutscher Genossenschafts- und
Raiff eisen Verband) in Kyrgyzstan
„Development of rural co-operatives“,
Kyrgyzstan
Agnese Krievina | Latvian State
Institute of Agrarian Economics, Riga,
Latvia
Deiva Mikelionyte | Lithuanian
Institute of Agrarian Economics, Vilnius,
Lithuania
Blagica Sekovska | Veterinary Faculty,
Institute for Food, Skopje, Macedonia,
The Fmr Yug Rp
Zakaria Abd Rahman | Dairy Farmer,
Redagri Farm Sdn Bhd, Hulu Terengganu,
Malaysia
Jaime Jurado Arredondo |
Universidad Autonoma de Chihuahua,
Chihuahua, Mexico
Amgalanbaatar Odonmajig, Tsetsgee
Ser-Od, Batchimeg Tumurjil |
Ministry of Food, Agriculture and light
Industry of Mongolia; Mongolian Dairy
Research Association, Ulaanbaatar,
Mongolia
Romy Das | Agriculture Researcher,
Nepal
Naomi K. Torreta | National Dairy
Authority, Quezon City, Philippines
António Moitinho Rodrigues |
School of Agriculture - Polytechic
Institute of Castelo Branco, Portugal
Michel Noordman | Dairy Farmer, S.C.
Boes Lapte S.R.L., Romania
Margita Stefanikova | Slovak Association
of Milk Producers (SZPM), Nitra,
Slovakia
Ben Moljk | Agricultural Institute of
Slovenia, Ljubljana, Slovenia
Hemali Kothalawala | Department
of Animal Production and Health,
Peradeniya, Sri Lanka
Xenia Hsiao | Forefront Enterprise Co.,
Ltd., Taipei, Taiwan, ROC
Adul Vangtal | Thai Holstein Friesian
Association (T.H.A.), Thailand
John Anglin | Paramount Dairies (2010)
Ltd, Uganda
David Balikowa | TechnoServe Inc.,
Kampala, Uganda
Evelina Budjurova | Justus-
Liebig-Universität, Gießen, Germany,
Uzbekistan
Vu Ngoc Quynh, Tieu Duc Viet |
Vietnam Dairy Association,
Vietnam
3

Table of contents
Institutional partners
of the IFCN Dairy Network
4
Preface
IFCN Dairy Report - developments 2000-2011 6
Regional maps and the typical farms 7
Questions and Answers about IFCN Dairy 8
1 Comparison of the typical farms 2011
1.1 Summary – Farm comparison 2011 13
1.2 Regional overview on costs and
returns of the dairy enterprise 14
1.3 Milk supply curves 2011 16
1.4 Cost of milk production in average sized farms 2011 18
1.5 Cost of milk production in larger farms per country 2011 19
1.6 Description of the dairy farms analysed 20
1.7 Cost of milk production only 22
1.8 Total costs and returns of the dairy enterprise 24
1.9 Returns: Milk price, non-milk returns and
decoupled payments 26
1.10 Description of direct payments and policies 28
1.11 Dairy enterprise: Profi ts and return to labour 30
1.12 Asset structure and return on investment 32
1.13 Overview of all typical farms analysed – costs and returns 34
1.14 Farm level time series analysis 2000-2011 36
2 Global monitoring dairy economic indicators 1996-2011
2.1 Summary: Monitoring dairy economic indicators 41
2.2 Global trends in oil, milk and feed prices 1981-2012 42
2.3 Milk prices in 2011 in US-$ 44
2.4 Monitoring milk prices 1996-2011 46
2.5 Monthly developments and key facts 48
2.6 Monitoring feed prices 1996-2011 50
2.7 Monitoring milk : feed price ratio 1996-2011 52
International
Dairy
Federation
3 Dairy sector and chain profi le
3.1 Summary – Status and trends in the dairy sector 58
3.2 Status and development of milk production 60
3.3 Top 20 dairy countries in 2012 62
3.4 Status of milk surplus, defi cit and self-suffi ciency 63
3.5 Importance of dairy trade and milk price transmission schemes 64
3.6 The dairy chain 66
3.7 World milk consumption 68
3.8 World population 69
3.9 Method explanation of the Country Page 2012 70
Dairy sector & chain profi les
3.10 Afghanistan 71
3.11 Albania 72
3.12 Algeria 73
3.13 Argentina 74
3.14 Armenia 75
3.15 Australia 76
3.16 Austria 77
3.17 Bangladesh 78
3.18 Belarus 80
3.19 Belgium 81
3.20 Bolivia 82
3.21 Brazil 83
3.22 Bulgaria 84
3.23 Cameroon 85
3.24 Canada 86
3.25 Chile 87
3.26 China 88
3.27 Colombia 90
3.28 Costa Rica 91
3.29 Croatia 92
3.30 Cyprus 93
3.31 Czech Republic 94
3.32 Denmark 95
3.33 Ecuador 96
3.34 Egypt 97
3.35 Estonia 98
3.36 Ethiopia 100
3.37 Finland 101
3.38 France 102
3.39 Germany 103
3.40 Greece 104
3.41 Hungary 105
3.42 Iceland 106
3.43 India 107
3.44 Indonesia 108
3.45 Iran 110
3.46 Ireland 111
3.47 Israel 112
3.48 Italy 113
3.49 Jamaica 114
3.50 Japan 115
3.51 Jordan 116
3.52 Kazakhstan 117
3.53 Kenya 118
3.54 Korea, Republic of 120
3.55 Kyrgyzstan 121
3.56 Latvia 122
3.57 Lithuania 123
3.58 Luxembourg 124
3.59 Macedonia 125
3.60 Malaysia 126
3.61 Mexico 127
3.62 Mongolia 128
3.63 Morocco 130
3.64 Nepal 131
3.65 The Netherlands 132
3.66 New Zealand 133
3.67 Nigeria 134
3.68 Norway 135
3.69 Pakistan 136
3.70 Panama 137
3.71 Paraguay 138
3.72 Peru 139
3.73 Philippines 140
3.74 Poland 141
3.75 Portugal 142
3.76 Romania 143
3.77 Russian Federation 144
3.78 Saudi Arabia 146
3.79 Serbia 147
3.80 Slovakia 148
3.81 Slovenia 149
3.82 South Africa 150
3.83 Spain 151
3.84 Sri Lanka 152
3.85 Sweden 153
3.86 Switzerland 154
3.87 Syria 156
3.88 Taiwan 157
3.89 Tajikistan 158
3.90 Thailand 159
3.91 Tunisia 160
3.92 Turkey 161
3.93 Uganda 162
3.94 Ukraine 163
3.95 United Kingdom 164
3.96 USA 165
3.97 Uruguay 166
3.98 Uzbekistan 167
3.99 Venezuela 168
3.100 Vietnam 169
© IFCN Dairy Report 2012

4 Special studies
4.1 Normative analysis on future alternative
feeding system in Jordan 174
4.2 Greenhouse gas emissions of milk production worldwide:
Assessment and analysis 176
4.3 Method development: Milk quality adjustment 178
4.4 Method development: Interest rate 180
4.5 Farm supply reaction 182
4.6 Opportunity costs of land use 184
4.7 Method development in global dairy
processor analysis 186
4.8 World market price for milk – Development
of a new IFCN world milk price indicator 188
Institutional partners
of the IFCN Dairy Network
© IFCN Dairy Report 2012
International
Dairy
Federation
Table of contents
A.1
Annex
13th IFCN Dairy Conference 2012 –
June 4– to 6– 2012 in Kiel, Germany 192
A.2 9th IFCN Supporter Conference –
September 26th to 28th 2011 in Monastier Treviso, Italy 193
A.3 Typical farm approach and data quality assessment 194
A.4 Description of the typical dairy farms analysed 196
A.5 Details on Country Page analysis: calculations and
defi nition of parameters on the example of India 202
A.6 Specifi cations of world regions 203
A.7 Assumptions for the calculations 204
A.8 IFCN Dairy publications 205
A.9 Exchange rates 1996 – 2011 206
A.10 Abbreviations 207
A.11 Who is who 208
5

IFCN Dairy Report – Developments 2000 – 2012
Which countries are participating in the IFCN Dairy Report activities in 2012?
6
Year Countries included in No. of farm types analysed* Topic of Country Report IFCN Dairy Conferences
farm comparison country profi le analysis
2000 8 8 21 Ex-post analysis 1996–2000 Sep-00
2001 20 20 52 Country reports on milk production Jun-01
2002 24 24 72 Dairy production systems survey May-02
2003 27 24 76 Farm structure analysis 1990-2001 May-03
2004 31 31 92 Dairy sector profi le 1981-2001 Jun-04
2005 33 41 102 Milk production fact sheet 1996-2003 May-05
2006 34 60 103 Dairy sector & chain profi le 1990-2004 May-06
2007 38 73 120 Milk production fact sheet 1996-2005 Jun-07
2008 44 78 134 Dairy sector & chain profi le 1996-2007 Jun-08
2009 46 80 147 Milk production fact sheet 1996-2008 Jun-09
2010 44 86 143 Dairy sector & chain profi le 1996-2009 Jun-10
2011 49 90 157 Milk production fact sheet 1996-2010 Jun-11
2012 51 91 171 Dairy sector & chain profi le 1996-2011 Jun-12
* Farms analysed in Chapter 1 and 4
Institutional partners
of the IFCN Dairy Network
International
Dairy
Federation
51 countries analysed in the Farm Comparison
+40 countries participated in the Country Pages
© IFCN Dairy Report 2012

North America
Idaho (ID)
1000, 2000
California (CA)
1100, 3000
Institutional partners
of the IFCN Dairy Network
Mexico
54S, 2000To
South America
Colombia
6, 30, 100
Africa
Morocco
3N, 8N
Chile
53
100
412
428++
1070
Nigeria
5
50
Peru
7
17
Argentina
170
400
600
© IFCN Dairy Report 2012
Wisconsin (WI)
80, 500
Brazil
25 SE
100 SE
20 S
50 S
Uruguay
64
122
371
Algeria
Tunisia
6, 18 2, 4, 5, 10, 12, 290
Cameroon
2
11
35
50
South Africa
210
470
630
Canada
49
83
New York (NY)
65, 500, 2029
120 PR
571 PR
Egypt
3, 4,
6, 14, 150
Ethiopia
4, 50
Uganda
1
3
13
International
Dairy
Federation
West Ludhiana
4N, 18N
Gujarat
3 W
Regional maps and the typical farms
Europe and Middle East
Germany
30 S
80 S
108 S
98 N
98 N++
120 N
240 N
85 E
400 E
650 E
650 E++
1150 E
Ireland
62
117
Luxembourg
52
117
Punjab
72NW
Pakistan
4
18
Karnataka
3S
UK
150 NW
245 SW Belgium
Spain
50 NW
105 NW
74 S
59 CN
40N
90N
Denmark
150
275
NL
76
197
France
38 MC
72 C
50 W
120 W
Switzer-
land
18
22
62
Norway
20
35
Italy
154
229
Sweden
55
70
139
230
Finland
24
70
132
Poland
15, 65, 110
Czech Republic
80, 425, 730
Austria
12-bio
22
45
Serbia
2
10
84
South East Asia and Oceania
India
Bangladesh
2, 14
Tamil Nadu
6SE
10SE
23SE
China-Heilongjiang
5HJ, 10HJ, 40HJ
Indonesia
3 NG, 10 NG,
2 JA, 10 JA,
Israel
71
365
China-Beijing
17BE, 340BE
Belarus
1, 620, 1153
Australia
Victoria
300
750
Ukraine
150, 425
Russia
1082, 1328
Jordan
3
30
75
400
Armenia
5, 7, 35
Turkey
15, 50
Iran
2, 27, 90,
120, 276, 458
New Zealand
355
1066
Legend: Legend: Numbers indicate the number of cows in the typical farms. N = North, E = East, S = South, W = West, NW = North
West, SE = South East, SW = South West, CA = California, BE = Beijing, bio = Organic, C = Central, CN = Central North, ++ = Farms
better managed than average, HJ = Heilongjiang, US-ID = US-Idaho, JA = Jabung, MC = Massif Central, NG = Ngatang, NY = New
York, PR = Parana, To = Torreon, WI = Wisconsin
7

Questions and answers about IFCN Dairy
What is IFCN?
IFCN stands for International Farm Comparison Network. The dairy
branch of the IFCN was founded in 1997.
1. IFCN Vision
We are the leading, global knowledge organization in milk production
2. IFCN Mission
We create a better understanding of milk production worldwide.
3. IFCN identity, competence, values and concept
The IFCN is a global network of dairy researchers related to companies
and other stakeholders of the dairy chain.
The IFCN has a Dairy Research Center (DRC) with approx. 10 researchers
coordinating the network process and running dairy research
activities.
Focus on milk production
In the dairy chain the major share of a) the costs, b) resources used,
c) emissions created and d) the political challenges come from producing
the milk itself.
That’s why the IFCN focuses on milk production and related topics
like milk prices, dairy farm economics, etc.
Core competence
The IFCN core competence is in the network of dairy people who
have built trust the last 10 years to openly share and discuss dairy
issues. This and the annual working process make the IFCN an ongoing
knowledge creation system.
Core values
The IFCN is independent from third parties and is committed to
truth, science and reliability of results.
The IFCN and all its partners commit themselves not to get involved
in any discussions or activities that may infringe any applicable competition
law.
Why is the IFCN useful for a dairy region?
To have a prospering dairy region, a clear strategy of all stakeholders
is required. The participation in IFCN provides information about the
global developments of the dairy sector and the competitiveposition
of a dairy region in it. Moreover, it identifi es potential points for
improvement.
Who benefi ts from the IFCN work?
1. Dairy farmers
Dairy farmers benefi t from knowing about their competitiveness in
a globalized dairy world. Moreover, they get access to information
about alternative production systems.
2. Milk processors
Information about the production costs in specifi c milk regions is a
key element for the competitiveness of the milk processor.
3. Farm input suppliers
Information about farm economics and global dairy developments
are very good tools to guide strategic discussion and decisions
within the company.
8
The concept of three circles
The IFCN network concept is based on three circles and the related
win-win partnerships.
The 3 circles of IFCN
Circle 3
get public goods of
IFCN – free of charge
Circle 2
get servises from IFCN
+ provide funding
Circle 1
Reserchers
creating the IFCN
knowledge
(the network goods)
Circle 1: The participating dairy researchers and the people in the DRC
create the IFCN knowledge by sharing and managing information.
Circle 2: Dairy related companies and organisations get services
from the IFCN. In return they fi nance the IFCN activities of the center
(DRC) and in the countries.
Circle 3: Part of the IFCN knowledge defi ned by the DRC can be
made available as a public good for the global dairy industry
4. Policy makers
The link with the IFCN knowledge provides the policy makers with
facts and fi gures for political discussions. Moreover, the IFCN tools
permit the evaluation of alternative policy scenarios.
5. Research organisations
Cooperation with IFCN off ers access to methods, models and data
which increases the capacity in dairy research and teaching. Technically,
the IFCN provides:
· Benchmarking: Analyse your dairy region in a global context.
· Networking: Link yourself to the leading network of experts
in your research topic.
· Access to data: Send in 2 farm types and get the world in return.
· Promotion: Promote your institution nationally and internationally.
Partnership with the IFCN network
The IFCN off ers diff erent kinds of partnership for the various stakeholders
of the dairy chain. For further information please contact us
(info@ifcndairy.org)
© IFCN Dairy Report 2012

The IFCN Dairy Research Center
Torsten
Hemme
Mikhail
Ramanovich
Othman
Alqaisi
Eva
Schröer-Merker
© IFCN Dairy Report 2012
Eva
Asmussen
Christoph
Sommer
Agribusiness partners of the IFCN
Milk processing
Milking and barn equipment
Health and hygiene
Feed
Genetics
Other branches of the dairy chain
Dorothee
Boelling
Nadira
Sultana
Franziska
Goergens
Mohammad
Uddin
Katja
Horten
Questions and answers about IFCN Dairy
Karin
Wesseling
Judit
Kühl
Lukasz
Wyrzykowski
Rebecca
Kühl
Eberhard
Bönemann
Massoumeh
Nasrollahzadeh
Elgin
Giff horn
Asaah
Ndambi
Peritus Farm DMCC
9

Colombia
Colombia pictures by T. Hemme.
12
Chapter 1 – Comparison of the typical farms 2011
Authors: Asaah Ndambi, Dorothee Boelling, Mohammad Mohi Uddin, Christoph Sommer, Othman Alqaisi,
Rebecca Kühl with the contribution from researchers mentioned on page 2-3 of this report
1.1 Summary – Farm comparison 2011 13
1.2 Regional overview on costs and returns of the dairy enterprise 14
1.3 Milk supply curves 2011 16
1.4 Cost of milk production in average sized farms per country 2011 18
1.5 Cost of milk production in larger farms per country 2011 19
1.6 Description of the dairy farms analysed 20
1.7 Cost of milk production only 22
1.8 Total costs and returns of the dairy enterprise 24
1.9 Returns: Milk price, non-milk returns and decoupled payments 26
1.10 Description of direct payments and policies 28
1.11 Dairy enterprise: Profi ts and return to labour 30
1.12 Asset structure and return on investment 32
1.13 Overview of all typical farms analysed – costs and returns 34
1.14 Farm level time series analysis 2000-2011 36
© IFCN Dairy Report 2012

Previous and this double page: IFCN Dairy Conference 2012
40
Chapter 2 – Global monitoring dairy economic indicators 1996 – 2011
Authors: Eva Schröer-Merker, Karin Wesseling, Massoumeh Nasrollahzadeh
with the contribution from researchers mentioned on page 2-3 of this report
2.1 Summary: Monitoring dairy economic indicators 41
2.2 Global trends in oil, milk and feed prices 1981-2012 42
2.3 Milk prices in 2011 in US-$ 44
2.4 Monitoring milk prices 1996-2011 46
2.5 Monthly developments and key facts 48
2.6 Monitoring feed prices 1996-2011 50
2.7 Monitoring milk : feed price ratio 1996-2011 52
© IFCN Dairy Report 2012

This and previous double page: Milk production in India.
Chapter 3 – Dairy sector and chain profi le
Authors: Karin Wesseling, Massoumeh Nasrollahzadeh, Eva Schröer-Merker, Judit Kühl, Łukasz Wyrzykowski
with the contribution from researchers mentioned on page 2-3 of this report
3.1 Summary – Status and trends in the dairy sector 58
3.2 Status and development of milk production 60
3.3 Top 20 dairy countries in 2011 62
3.4 Status of milk surplus, defi cit and self-suffi ciency 63
3.5 Importance of dairy trade and milk price transmission schemes 64
3.6 The dairy chain 66
3.7 World milk consumption 68
3.8 World population 69
3.9 Method explanation of the Country Page 2012 70
3.10 – 3.100 Country Pages 71
© IFCN Dairy Report 2012
3.xx xxxxxxxxx
57

Dairy Research Center
DAIRY SECTOR AND CHAIN PROFILE
© IFCN Dairy Report 2012
Eva Schröer-Merker
Status 2011
• Self-sufficiency in milk: 127%
• Milk production (cow‘s): 31.1 mill t ECM
• Export: approx. 65% of production
• Import: approx. 56% of local consumption
Key developments 2006-2011
• Milk production (cow‘s): +1.6% per year
• Dairy consumption per capita: +1.7% per year
• Population: -0.2% per year
Milk equivalent (ME) calculation based on fat and protein only
Key variables of the dairy sector
Illustration of the dairy chain
3.39 Germany – Dairy sector and chain profi le
Milk production
mill t milk (ECM)
Change in monthly milk delivered
% change
annual change
1996 1998 2000 2002 2004 2006 2008 2009 2010 2011 '01-'06 '06-'11
Milk production (cow's)
Production (mill t ECM) 29.88 29.44 29.34 28.82 29.29 28.76 29.39 30.01 30.47 31.08 -0.3% 1.6%
Cows (in 1,000's) 5,195 4,833 4,564 4,373 4,287 4,054 4,229 4,169 4,182 4,190 -2.0% 0.7%
Milk yield (t/cow/year) 5.75 6.09 6.43 6.59 6.83 7.10 6.95 7.20 7.29 7.42 1.7% 0.9%
Dairy consumption (from all dairy species)
Consumption (mill t ME) 23.63 23.00 22.11 24.87 21.66 22.71 22.93 22.70 23.12 24.48 0.6% 1.5%
Population (mill people) 81.84 82.00 82.08 82.31 82.38 82.26 82.01 81.77 81.60 81.44 0.0% -0.2%
Consumption (kg ME/capita) 289 281 269 302 263 276 280 278 283 301 0.5% 1.7%
The dairy chain
Milk delivered in % 94% 94% 95% 95% 96% 96% 96% 97% 97% 97% 0.1% 0.1%
Share (Processor, retailer) in EUR/100 kg ECM 30.9 27.2 22.9 28.6 26.3 28.7 33.4 29.8 28.7 28.8 2.9% 0.1%
Farmers' share of consumer price 45% 50% 54% 49% 49% 46% 48% 42% 49% 51% -3.0% 1.9%
Farm gate milk prices
EUR / 100 kg milk (ECM)
45
40
35
30
25
20
15
10
5
0
National price
IFCN milk price indicator (world)
2006 2007 2008 2009 2010 2011 2012
monthly
Consumer & farmers' prices
EUR / 100 kg milk (ECM)
Explanations
Method: See Chapter 3.9 for details. Sources: National statistics supplemented by data from FAO, IMF, OANDA. Other dairy species: Sheep and goat.
Data: 2012 data preliminary and partly estimated. Cooperatives‘ share on milk intake shown in the list is an IFCN estimate based on partner information.
Consumer price (raw data) for: Fresh milk, 1 litre packing with 3.5% fat, 3.17% protein.
Change in milk production: Change in milk production/delivery: Febuary 2008/2012 adjusted to 28 days (leap years).
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
80
70
60
50
40
30
20
10
0
1996
1996
1998
Milk not delivered to dairies
and milk from other animals
Milk delivered to dairies
VAT
Share (Processor, retailer)
"Farmers' milk price"
Consumer price
1998
2000
2000
2002
2002
2004
2004
2006
2006
2008
2008
2010
2010
15%
10%
5%
0%
-5%
-10%
-15%
% change to previous year
Average annual % change
2007 2008 2009 2010 2011 2012
monthly
Milk processors list 2010
Milk intake in 1,000 tons (natural content)
DMK 6800
Hochwald 2013
Müller 2000
Milch-Union Hocheifel eG 1238
Molkerei Ammerland eG 1077
Uelzena eG 1007
Omira Oberland Milchverwertung GmbH 952
Zott GmbH und Co. KG 852
Rücker GmbH 800
Bayerische Milchindustrie eG 782
Cooperatives: 62% of milk intake shown
Share on national milk delivery
Rest 39%
Processor 1
Processor
2-10
103

Mexico – pictures by Torsten Hemme
Chapter 4 – Special studies
4.1 Normative analysis on future alternative feeding system in Jordan 174
4.2 Greenhouse gas emissions of milk production worldwide: Assessment and analysis 176
4.3 Method development: Milk quality adjustment 178
4.4 Method development: Interest rate 180
4.5 Farm supply reaction 182
4.6 Opportunity costs of land use 184
4.7 Method development in global dairy processor analysis 186
4.8 World market price for milk – Development of a new IFCN world milk price indicator 188
© IFCN Dairy Report 2012
173

This double page: IFCN Dairy team and its activities in 2012
Annex
A.1 13 th IFCN Dairy Conference 2012 – June 4 – to 6 – 2012 in Kiel, Germany 192
A.2 9 th IFCN Supporter Conference – September 26 th to 28 th 2011
in Monastier Treviso, Italy 193
A.3 Typical farm approach and data quality assessment 194
A.4 Description of the typical dairy farms analysed 196
A.5 Details on Country Page analysis: calculations and
defi nition of parameters on the example of India 202
A.6 Specifi cations of world regions 203
A.7 Assumptions for the calculations 204
A.8 IFCN Dairy publications 205
A.9 Exchange rates 1996 – 2011 206
A.10 Abbreviations 207
A.11 Who is who 208
© IFCN Dairy Report 2012
191

Partners of the IFCN Dairy Network
Dairy researchers representing 90 countries
Institutional partners
Agribusiness partners
Milk processing
Milking and barn equipment
Health and hygiene
Feed
Genetics
Other branches of the dairy chain
ISSN 1610-434X
International
Dairy
Federation
Peritus Farm DMCC