Processing

Sustaining Dairying is All About Costs

GLOBAL - Each litre of milk sold in the world has a production cost of which 70-80 per cent is incurred at producer level.

28 October 2013

2 minute read

Managing economic sustainability and profits is therefore determined by controlling these costs, according to the International Farm Comparison Network.

Presenting world dairy production figures at the World Dairy Forum in Cologne, Germany, last month, managing director of the IFCN, Torsten Hemme said that dairy farmers have to be competitive with different milk producing systems and announced that a cost defining tool is progressing to aid farm efficiency.

Average herd figures show the variety in systems being employed around the world and the gulf in production costs.

Available data from 2011 showed that milk is more expensive to produce in Canada than the US and that Italian and Scandinavian producers had higher costs than France, Spain and Germany, which in turn had higher costs than the UK.

Milk was cheapest to produce in central Africa and Pakistan as Australia and New Zealand benefitted from cheaper farming than global competitors in the US and EU.

The IFCN expects world milk output to increase 2.3 per cent over the next 10 years, to be driven largely by 50 per cent increases within India, Africa and South America.

Europe, the US and Russia are not expected to lift production greatly, the US being the highest of the three at an estimated 15 per cent.

This was part of several presentations at the Forum which underscored how important economic stability and sustainability are for the dairy sector.

Michel Nalet, European Dairy Association president, discussed national sustainability strategies in the Netherlands and UK.

He told TheDairySite that the two programmes extend beyond the scope of farm economics and into environmental measures.

Both the UK’s Dairy Roadmap and the Dutch Sustainable Dairy Chain have made inroads into reducing the impacts from farmers and processors making the industry ‘greener’.

“The UK’S Dairy roadmap has yielded a 73 per cent reduction in waste to landfill on the processors’ side, and an uptake of 78 per cent of water efficiency measures on the producers’ side,” said Mr Nalet.

“The Dutch project, presented by Mr. Boer from FrieslandCampina, laid out clear targets in relation to climate and energy, animal welfare, grazing and biodiversity.”