At the AqAltyn 2024 conference held on November 26-27 in Turkestan, Kazakhstan, Muzaffar Yunusov, Senior Analyst at the International Farm Comparison Network (IFCN), presented key trends and forecasts for the global dairy industry. Yunusov highlighted critical factors impacting production, consumption, and sustainability within the sector.
Global Dairy Trends
IFCN’s analysis predicts that by 2030, global milk consumption will grow by 113 million tons, reflecting an 11% increase. This surge is attributed to population growth and improved living standards in developing countries. Key trends include:
- Rising Demand: Milk consumption per capita is expected to grow by 5.5%, adding 7 kg of dairy equivalent per person annually.
- Farm Consolidation: A 10% reduction in the number of dairy farms is anticipated, driven by efficiency improvements and technological advancements.
- Productivity Growth: Milk yield per cow is projected to rise by 15%, thanks to advancements in genetics, nutrition, and veterinary care.
Milk Prices and Farm Profitability
Current global milk prices average $48 per 100 kg of standard cow milk (SCM), reducing export opportunities due to competitive pricing in international markets. Futures suggest prices may decline to $45 per 100 kg by the end of 2024, with a less likely scenario of a drop to $30 per 100 kg.
Analysis of farm incomes from 2018 to 2023 reveals regional disparities:
- Germany: Dairy farmers faced negative profitability in 2019-2020, with minor recovery in 2021 and a peak income of $14 per 100 kg in 2022, before falling to $3 in 2023.
- Kazakhstan: Farmers saw steady growth, from $15 per 100 kg in 2018 to $23 in 2023, driven by technological investment and market adaptation.
- China: Farm incomes have declined steadily, from $8 in 2018 to $3 in 2023, signaling challenges in production profitability.
Drivers of Change in Dairy
- Population Growth: Global population is expected to reach 8.5 billion by 2030, driving higher dairy demand.
- Technological Advances: Innovations in feeding, herd management, and processing are enhancing productivity and quality.
- Climate Change: Extreme weather events and water scarcity are pushing for sustainable practices.
- Shifting Consumer Preferences: Growth in demand for value-added and functional dairy products, as well as plant-based alternatives.
Challenges and Solutions
- Climate Impact: Increasing frequency of extreme weather necessitates sustainable farming practices.
- Workforce Shortages: Aging rural populations and urbanization are reducing labor availability.
- Sustainability Expectations: Consumers demand greater transparency and eco-friendly practices.
IFCN Recommendations:
- From Profitability to Sustainability: Collaboration across the supply chain is essential to ensure stable raw milk supplies.
- Addressing Environmental Barriers: Cost-effective solutions are needed to minimize emissions and mitigate climate risks.
- Modernizing Dairy Operations: Bridging the gap between urban demand and rural supply requires investments in technology and efficiency.
The dairy sector’s future hinges on balancing profitability, sustainability, and evolving consumer expectations, with opportunities for growth particularly evident in developing markets like Asia.
