Asian companies invest €3.6bn in Russian dairy production
Asian dairy companies have been making significant investments in Russia in the last year or so.

Businesses from Vietnam and Thailand have made direct investments in the Russian dairy sector and it is helping Russia to replace the dairy imports it lost after it placed an embargo on western food imports in 2014.

TG Group, a Vietnamese dairy producer, commenced the building of milk farms in the Moscow region this week as part of its 10-year project worth over €2.4bn.

Another investment backed by the state-owned Russian Direct Investment Fund agreed to join forces with the Charoen Pokphand Group from Thailand on a joint investment for the construction of a €900m milk and dairy complex in the Ryazan region of Russia.

Russian Agriculture Minister Alexander Tkachev said: “It is not the easiest time for our country. We live in conditions of food sanctions and when the Vietnamese government supports us, it means a lot to us.”

Thai Huong, group chair of TH Group, said the first stage of the project will lead to the production of 800 tonnes of milk and products per day, and these are expected to reach the Russian market next year.

Dairy markets: cheese and milk powder prices rising in Europe
German milk production is slightly behind 2018 levels for the opening quarter of this year.

Cheese and skimmed milk powder (SMP) prices are rising across Europe.

The arrival of summer has given a lift to cheese markets in Europe, with spot prices for cheddar and gouda lifting this week to €3,200/t and €3,000/t respectively.

Mozzarella prices are steady at €3,150/t, which is a very healthy price level.

At the same time, prices for SMP lifted further this week across Europe.

The Dutch dairy board is reporting SMP prices have lifted a further €50/t this week to €2,050/t. In contrast, prices for whole milk powder (WMP) dropped slightly below €3,000/t this week.

Butter prices also slipped back slightly to €4,000/t, which is still a very strong price in historic terms.

On the milk supply front, EU milk production remains subdued this spring. In Germany, milk production for the month of March stood at 2.74bn litres, which is 1.2% ahead of the same month last year.

However, it must be remembered that March 2018 was an exceptionally difficult month for European farmers thanks to adverse weather conditions, so it is no surprise to see German milk supply increased for March 2019.

This brings German milk production for the first quarter of 2019 to 7.8bn litres, which is in line with last year. In France, milk collections for March were down almost 1% on last year at 2.1bn litres. This brings French milk production for the first quarter of 2019 to 6.1bn litres, which is down 2% on the same period last year.

Still opportunities for Irish dairy in China
Aidan Brennan in Shanghai reports on the state of play of dairy markets in China.

With a population of 1.3bn people, the potential of China as a market for Irish food is immense. The country has 20% of the world’s population, but only 9% of its arable land area. Over the last decade it has started to import dairy products. Prior to that the consumption of dairy was confined to milk produced within China. Now almost 30% of the dairy consumed in China is imported. It is the largest importer of dairy in the world, with a liquid milk equivalent of around 12bn litres imported last year. About 32bn litres of milk is produced in China.

New Zealand is the most dominant exporter to China. According to Rabobank’s Sandy Chen, it exports 71% of the milk powders, 89% of the butter and fats and 51% of the cheese into China. A free-trade agreement allows for tariff-free access for NZ produce into China. In many respects, NZ is like the outside farm for China.

The Glanbia stand at the SIAL trade fair in China.

But the size of the population and the growth in dairy consumption allows room for others. The EU dominates the infant milk formula market, supplying 75% of the total imported by China. Ireland is just one of a number of players, accounting for 14% of the total imports.

In value terms, this accounts for around 95% of the total Irish dairy trade in China and, as China is the second-largest destination for Irish exports, the Chinese infant milk formula market is hugely important for Ireland.

Chen was speaking at a trade seminar in Shanghai organised by Bord Bia. Minister for Agriculture Michael Creed led a trade mission to China this week. The trade mission coincided with SIAL, the massive food trade fair held in Shanghai. Between SIAL and a big bakery trade fair last week, Irish dairy companies are out in force, trying to capture more of the Chinese market.

There are about nine huge halls at SIAL where countries and companies promote their food offerings covering all types of food.

Glanbia, Kerry and Dairygold have offices in China, with full-time employees on the ground making contacts and doing deals. Carbery had a stand at the bakery fair last week and had a presence at SIAL. It is pushing its mozzarella strongly. Mozzarella consumption is increasing in China, both on pizzas and in snacks. Carbery and Glanbia are investing in mozzarella production to reduce their dependence on cheddar.

Leaving aside Irish infant milk formula, which is marketed and sold by manufacturers such as Danone and Wyeth, €27m worth of other Irish dairy products were sold in China last year. This is small but growing, considering the size of the market. Glanbia has a consumer brand presence in China. It has launched a new UHT whipped cream, with a shelf life of six to nine months. Lakeland and Glanbia also have a presence in UHT milk.

Glanbia sell a range of UHT milk and creams in China

Of course, China is not without its challenges. The rate of population growth has declined, with 2m fewer babies born last year – a 14% drop. If this trend continues, it will affect the growth in the infant milk formula market.

The future relationship between imported and domestic product could be an issue. After the melamine food safety scares in the late 2000s, imported dairy products were seen as better quality and safer. However, people I spoke to in Shanghai are seeing a general change in the attitude of the Chinese. They are increasingly viewing Chinese made products as being superior to imported products, particularly in the area of manufacturing and technology.

The Bord Bia Irish trade stand at SIAL in Shanghai heavily promoted the green image of Ireland.

Whether the same perceptions will translate to food remains to be seen. As it stands, imported dairy products are cheaper and produced to a higher standard than Chinese. Demand for dairy in China is increasing by about 2% per year and is being matched by imports.

The structure of Chinese dairy farming is changing though, with the number of farms milking fewer than 100 cows halving since 2008 and the number of farms milking more than 1,000 cows increasing sixfold. Pollution and a scarcity of water and land will likely mean that no matter what the public perception is, China will always need the outside farm.

The Bord Bia Irish trade stand at SIAL trade fair in Shanghai, China.

Watch: Camera at the Mart – solid trade at Moree Holsteins dispersal sale
The noted Moree Holstein herd of milking cows went under the hammer last week with an on-farm dispersal sale attracting strong buying interest from both sides of the Irish border, as well as Britain.

Camera at the mart attended the dispersal sale of pedigree Holstein cattle from the Moree Herd, owned by the Kelso family, near Dungannon.

The sale was held on Friday 10 May, with 180 cows in milk forwarded for sale. Conducting the sale on behalf of the Kelso family was Taaffe Auctions, Dundalk, with all animals sold on farm.

Buyers came from Northern Ireland, Republic of Ireland and Britain to avail of some of the best Holstein genetics within the British Isles.

Moree Omen Mary, a second calving animal yielding 52 litres, sold for 2,020 gns.

The herd was the recipient of the 2019 master breeder award from Holstein UK, recognising the herd’s performance for superior milk yield and solids, cow classification and longevity.

All cows are milk recorded monthly with the last recording in April giving a 12-month rolling yield of 10,800 litres at 4.01% butterfat and 3.3% protein.

Moree Flame Steff, a first cavlved heifer yielding 43 litres, sold for 1,800 gns.

Topping the sale was Moree Rubicon Marqi, selling for 5,000gns. It moves to a new home in the Republic of Ireland. This September 2015-born animal is sired by EDG Rubicon and yielded 9,540 litres as a heifer. Embryos from this family line have been exported to New Zealand.

Moree Mccutchen Sue 2, a first calved heifer yielding 41.2 litres, sold for 1,680 gns.

The second-highest priced animal was Moree Fever Twine, a Crackholm Fever daughter in her third lactation and currently yielding 70kg of milk daily. This December 2015-born animal sold for 4,500gns.

Moree Embassey Lidia, a first calved heifer yielding 43 litres, sold for 2,520 gns.

Another standout lot was the second-calving cow, Moree Glenton Nora, sired by Welcome Glenton. This September 2015-born animal calved on 25 December and was inseminated to Nihao on 17 April. Yielding 73.5 litres daily, Nora sold to 3,050gns.

This was followed by 3,000gns for Moree Hurricane Yab Yum, a Hurricane heifer yielding 43.5 litres daily.

Moree Cashcoin Belle, a second calving animal yielding 53 litres, sold for 2,350 gns.

Selling for 2,800gns was Moree Maple Tina, a second-calving heifer due to start her third lactation in late October.

Tina is in-calf to Delaberge Pepper through sexed semen and is currently yielding 47 litres/day. Making 2,500gns was Moree Penguin Verona Red, bred by Moree Atlantic Penguin Red.

Moree Josuper Belle, a first calved heifer yielding 45.5 litres, sold for 2,400 gns.

Verona Red was inseminated to Bob Cyprus and is yielding 50.7 litres/day, with a first lactation of 12,000 litres.

This was matched by Moree Hurricane Penny, a December-calved heifer yielding 41 litres/day. Moree Josuper Belle sold for 2,400gns.

Moree Flame Belle, a second calving animal yielding 47 litres, sold for 2,350 gns.

This was followed by 2,350gns for Moree Flame Belle, while Moree Cashcoin Belle also sold for 2,350gns.

Moree Iota Belle, a fifth calving cow yielding over 40 litres sold for 1,420 gns.

Moree Maple Tina, a third calving animal yielding 47 litres, sold for 2,800 gns.

Moree Maple Amber, a fourth calving cow yielding 61.7 litres, sold for 2,200 gns.

Moree Glenton Nora, a second calving animal yielding 73.5 litres, sold for 3,050 gns.

Read more

Newford Farm recruiting new farm manager

Glanbia holds price for April milk supplies