Dairy challenges: A comparison

For the purpose of illustrating the trends and drivers for milk supply, demand and the dairy chain, it has been attempted to make the indicators comparable between the countries. Comparison of ten selected developing countries and three developed dairy countries (Germany, New Zealand and USA) have been analyzed into a global context. The developing countries are Bangladesh, Cameroon, China, India, Morocco, Pakistan, Peru, Thailand, Uganda and Viet Nam.

India is the world’s largest milk-producing country with an annual production of 108 million tons of ECM, 65 per cent of which is produced by buffaloes, and a national herd of 113 million head of cattle/ buffaloes. Some 75 million dairy farming households, with an average of 1.5 adult female cows or buffaloes per farm, are engaged in the sector each producing about 4 liters of milk per farm/day. During the period under review, production rose by 3 to 4 per cent per annum or approximately 4 million tons. Feeding is based mainly on crop residues such as straw and green fodder, supplemented by small quantities of low cost compound feed. Milking is done by hand and the milk is transported to village collection centers or collected by local milkmen. About 45 per cent of the milk is used by the farming households and only 15 to 20 per cent is delivered to formal milk processors. Rising demand for milk was mainly driven by population growth whereas increases in per capita consumption have now become an additional driver. India has always been 100 per cent self-sufficient in milk, with total imports/exports of only 0.3 million tons per annum; it may thus be considered as almost unconnected with the world dairy market.

Pakistan was the world’s third largest producer of milk in 2005 with a production of 34.4 million tons of ECM, , with buffaloes accounting for 75 per cent of production. Milk is produced by approximately 15 million dairy farming households with an average of 1.8 adult cows or buffaloes per farm producing approximately 6.4 liters of milk per farm/day. Between 2000 and 2005, production grew by 2.9 per cent per annum. Milk production increased due to increase in numbers of milking animals and not in higher milk yields. Dairy production systems in Pakistan are similar to those in India. Almost (50 per cent) of the milk is consumed by the farming households or sold on the informal market and less than 10 per cent is delivered to formal milk processors. By 2005, yearly milk consumption in Pakistan had reached 230 kg per capita, significantly higher than in India. Increased demand for milk was mainly driven by population growth. Like India, Pakistan has always been completely self-sufficient in milk, with imports/ exports of only 0.22 million tons per annum.

In Bangladesh systems of dairy production is similar to that of India and Pakistan. However, milk production and yield (2.8 million tons ECM from cows and buffaloes, and 711 kg of ECM per cow/per day, respectively) is significantly lower than in India and Pakistan. Most of the milk is consumed by farming households or sold on the informal market, and less than 20 per cent is delivered to formal milk processors. In 2005, per capita milk consumption stood at only 32 kg/year. Bangladesh is 85 per cent self-sufficient in milk and it imports 0.4 million tons per annum to meet its needs. Thailand was producing 0.8 million tons of ECM in 2005, less than 1 per cent of that produced by India. With an annual increase of 8.4 per cent, production has increased rapidly since 2000, mainly due to greater increasing numbers of cows.

An average of 20 cows per farm, Thailand’s dairy herds are considerably larger than those in Bangladesh, India and Pakistan. Moreover, the country’s dairy farming system is more intensive than in other parts of South Asia owing to its development policy and high milk prices. Dairy production relies mostly on Holstein cows that have higher milk yields than the buffaloes or local cows used in Bangladesh, India and Pakistan. Milking is mainly done by machine and about 95 per cent of the milk is delivered to formal milk processors. Yearly milk consumption in 2005 was 21 kg per capita. Country’s milk self-sufficiency increased from 33 per cent in 1996 to 47 per cent in 2005. However Thailand’s annual milk deficit still stands at approximately 1 million tons.

Viet Nam is the smallest milk producer of the Asian countries with a production level of 0.23 million tons of ECM in 2005. However, during the period under review, milk production grew by more than 20 per cent per annum, mainly driven by increasing milk yields that had reached 1.73 tons per cow/year by 2005. On average, dairy farms in Viet Nam have 6.9 cows producing 32 liters of milk per farm/day. Production is mainly based on imported dairy cattle or crossbreds with local cattle. As in Thailand, about 95 per cent of Viet Nam’s milk is delivered to formal milk processors. Per capita milk consumption increased from 4 liters in 1996 to 10 liters in 2005. Viet Nam is currently 25 per cent self-sufficient in milk, and imports about 0.6 to 0.8 million tons per year.

China was the world’s fifth largest producer of milk in 2005, accounting for 24.5 million tons of ECM from cows and buffaloes. According to its yearly increase trend of 27.2 per cent in the production of cow’s milk over the period 2000 to 2005, China is expected to rapidly become the world’s third largest milk producer. Moreover, as most of the milk is sent to formal processors, China will soon rank second in terms of milk processing volumes. Production growth has been driven mainly by increased numbers of cows rather than increased milk yields.

China’s milk yields are the highest of all the Asian countries with an average of 3.7 tons per cow/annum. While the average herd size stands at 6.7 cows. Chinese dairy farms fall into two categories: small farms with 1 to 40 cows; and large farms with more than 200 cows. The small farms usually deliver their milk to a local collection point, take their cows to village milking centers or belong to a ‘dairy garden’ for which investors have provided the basic dairy infrastructure. The larger farms are either operated by the state or by private investors with close ties to the major dairy companies. As most dairy farms in China have insufficient land, farmers are obliged to purchase compound feed and roughage, the latter mainly in the form of corn silage. Annual per capita milk consumption increased from 8 liters in 2000 to 22 liters in 2005 and to an estimated 28 liters in 2007. Chinese milk production covers only 86 per cent demand that is produced within the country.  

0.8 Million dairy farmers of Uganda, with an average of 2 cows/farm yielding 3.6 liters of milk per farm/day, produced 1.4 million tons of ECM in 2005. Annual milk production raised by 13.1 per cent since 2000, due  to increased milk yields (from 510 kg/cow/year in 2000 to 800 kg/cow/year in 2005). Milk supply in Uganda is very seasonal, peaking in April with 125 per cent of the yearly average and at its lowest in June/ July with only 65 per cent of the yearly average. Dairy farming systems of Uganda may be classified as low-input/low-yield. Feeding is based mainly on grazing supplemented by small quantities of low-cost compound feed. Milking is done by hand and the milk transported to milk collection centers in villages or collected by local milkmen. About 30 per cent is consumed on-farm.  Annual per capita milk consumption in 2005 stood at 50 kg, increasing by 4 to 6 per cent per annum. As yearly population growth is in excess of 3 per cent, it follows that national milk demand is increasing by 8 to 10 per cent per annum. Currently Uganda is self-sufficient in milk and in other words it neither imports nor exports significant volumes of dairy milk. Only 2 per cent of the milk is delivered to formal processors.

According to official statistics, dairy production in Cameroon remained stable between 1996 and 2005 with 0.13 million tons of ECM produced by approximately 4 000 dairy farmers. Milk production and yields in Cameroon are lower than in Uganda, contrary to claims of increases on the part of local dairy experts. Milk production in Cameroon is a secondary activity of larger cattle herds that are kept for beef production. Feeding is mainly based on grazing and no use is made of compound feed. Milking is done by hand, and only 2 per cent of the milk is delivered to formal milk processors. Yearly per capita milk consumption in 2005 was 14 kg but, according to official statistics, it is declining. In the same year, Cameron imported about 23 per cent of its milk needs.

Peru produced 1.27 million tons of ECM on 108000 dairy farms in 2005, with an average of 6.4 dairy cows/farm producing about 32 liters of milk per farm/day. This shows a yearly growth of 4.5 per cent, of which the main determinant was a 6.5 per cent increase in the number of cows in 2000 to 2005. Over the same period, however, yearly milk yields per cow decreased from 2000 kg to 1850 kg. Dairy farming systems may be classified as low-input/low yield. Feeding is based mainly on grazing supplemented by small quantities of low-cost compound feed. Some milk is produced on intensive dairy farms, mainly in the coastal region. Milking is done by hand and the milk transported to milk collection centers in villages or collected by local milkmen; about 94 per cent of the milk is delivered to formal milk processors. Country’s annual per capita milk consumption in 2005 stood at 51 kg. Increased demand for milk from 2000 to 2005 was mainly driven by population growth (1.5 per cent/year). Peru is approximately 93 per cent self-sufficient in milk.

Morocco’s dairy sector is very similar to that of Uganda. During the year 2005, some 1.4 million tons of milk was produced by 0.8 million dairy farmers with an average of 2 cows/farm. Milk production is estimated to be growing at about 4.2 per cent per annum. Milk production in Morocco is usually a side activity of crop farmers cultivating around 2 ha of land. The feeding system is similar to that in India/Pakistan and is mainly based on compound feed and green fodder. Milking is mostly done by hand and, in 2005, about 63 per cent of the milk was delivered to formal milk processors. Per capita milk consumption in 2005 stood at 62 kg. Morocco is a net importer of dairy products (0.4 million tons ME), and is 80 per cent self-sufficient in milk.

Germany was the world’s fourth largest producer of milk in 2005, with 29.5 million tons of ECM, and the second largest milk processor. Milk is produced by 110000 dairy farmers with average herds of 37.6 cows producing 732 kg of milk/day (19.5 kg/cow). National milk production has been stable since 1990 because of the milk quota system. Yields increased by 2 per cent per annum in 2000 to 2005, although the number of dairy cows decreased by 2 per cent per annum over the same period. Its dairy production systems may be classified as high-input/high-output (7100 liters per cow/year). Feeding is based mainly on grass/corn silage and compound feed. Milking is done by machine, after which the milk is stored on-farm in cooling tanks and collected by local milk processors every two days. About 95 per cent is delivered to milk processors; the remainder is either used on the farms (for home consumption or for feeding calves) or is sold directly to consumers. Since 1996, the country’s annual per capita consumption stood at 309 kg of ECM in 2005. As a member of the EU, Germany exports about 40 per cent of its milk and imports some 30 per cent of its consumption needs. The country is 116 to 127 per cent self-sufficient in milk, which translates into a surplus of 4 to 6 million tons per annum.

Since 1975, national milk production of USA has grown steadily by 1.1 per cent per annum, driven by yield increases of 1.5 per cent and a 0.3 per cent reduction in the number of dairy cows. USA produces 76 million tons of ECM/year, generated by 78 000 dairy farms with average dairy herds of 115 cows producing 2643 liters/day (23 liters/cow).  The country’s dairy production systems may be classified as high-input/high-output (8400 liters per cow/year). As in Germany, feeding is based mainly on grass/corn silage and compound feed. The cows are milked by machine, mainly in milking parlours, and the milk is stored on-farm in cooling tanks before being sent to formal processors. About 99 per cent of the milk is delivered to processors. Since 2000, annual per capita milk consumption has remained stable at around 250 kg of ECM. In 2005, the USA exported about 3.4 per cent of its milk and imported 2.8 per cent of its internal demand. Self-sufficiency stood at around 104 per cent in 2000 to 2005, translating into an annual milk surplus of 3 to 5 million tons.

New Zealand was producing 15.8 million tons of ECM in 2005. This was being produced by 12300 dairy farmers with average dairy herds of 315 cows yielding 3526 kg/ day (or 11.2 kg/cow). Production increased by 4.6 per cent per annum in 2000 to 2005, mainly driven by increased numbers of cows. Its dairy production systems may be defined as intermediate-input/intermediate-output (3868 liters per cow/ year). Feeding is based mainly on grazing. Milk production is therefore seasonal, peaking in November (180 per cent of the annual average) and at its lowest in June and July (5 to 10 per cent). Milking usually takes place in swing-over parlours or rotary milking systems, after which the milk is stored in cooling tanks on-farm and then collected by local milk processors. Almost 100 per cent of the milk is delivered to formal milk processors. New Zealand exports about 95 per cent of its milk production and, with an export volume of about 15 million tons; it is the world’s largest exporter of the commodity.