Global milk demand expected to increase until 2025
Global growth in milk demand of 25% or 20mT/year until 2025 is expected, according to a new report

The report, which was compiled by IFCN (International Farm Comparison Network), found that the growth in the global population will see demand for dairy products continue.

Torsren Hemme, managing director of IFCN, said: “There will be one billion more consumers on this planet that will have demand for milk products. Globally seen, each person will consume 13kg more in milk equivalent over ten years (ie 127kg per person in 2025). Therefore, the level of global milk supply will also keep growing, provided that the consumers still have positive preferences for milk and the political and overall economic situation is stable.”

Milk price will be the major driver of any expansion in milk supply. IFCN estimates a milk price of $41/100kg milk (40 c/l) at 4% fat and 3.3% protein, which is much higher than present levels. This milk price would allow the expansion of 208mT, which would be about 38 times Irish milk production.

Irish connection

IFCN has its headquarters in Germany but has dairy experts from every continent in the world including Teagasc’s Fiona Thorne.

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The report also says there will be a smaller number of bigger dairy farms, with higher yield per cow.

Australia aims for A$100bn industry
Fiona Simson, president of Australia’s national farmers federation, spoke to the Irish Farmers Journal about the ambitions of Australia’s agriculture.

The president of Australia’s national farmer’s federation (NFF), Fiona Simson, was in Dublin this week as part of a series of visits to EU countries.

She is holding meetings with farm organisations across the EU and will meet Copa Cogeca, the umbrella body for EU farm organisations. In Ireland, she also held talks with the IFA.

When the IFJ enquired about the purpose of her visit to Ireland, she explained that it was NFF’s view that farmers from across the world face many challenges in common and that it was important to share knowledge and learn from each other.

The big issue for farmers in Australia at present is profitability, or “making a dollar” as she described it, and “having community trust”, which is communication with people to help understanding of how farming fits with the environment and how it is a good thing.

Weather

While weather has been a major issue in Ireland for the past year, drought is a regular feature of Australian farming with parts of the eastern seaboard of Australia being in drought for seven years at this stage.

It has impacted severely on livestock and grain production though the loss of grain production was offset somewhat by Western Australia being able to meet the shortfall, she explained.

Road map 2030

In terms of where Australian agriculture was, the NFF President referred to their recently published Roadmap 2030.

This is not dissimilar to our Food Harvest 2020 or Food Wise 2025 plans and it has an ambition to grow the value of Australian agriculture from the A$65bn that it is today to A$100bn by 2030.

The equivalent in euro would be increasing from €42bn to €65bn. Like Ireland, Australia is a large net exporter of agricultural produce, with 70% of its output exported.

That means their exports would grow from the equivalent of €32bn at present to €45bn by 2030. By way of comparison, Irish food exports in 2016 were €12.5bn, including drinks.

Export markets

The IFJ put it to the NFF president that they would have to grow their export markets to accommodate this expansion and was that why they were engaged with the EU on negotiation of a free trade agreement (FTA).

She replied that Australia was talking to the EU and the UK and was of the view that a FTA could bring wins for all.

Prior to the UK joining the then EEC in 1973, it was Australia’s only export market of any significance for agricultural produce. This was lost at a stroke and since then Australia has developed export markets in Asia which is now their local market as well as North America and some sales to the EU which they have the ambition of increasing.

Two-way trade

The NFF President did acknowledge that trade was a a two-way process and they were prepared to open their doors to imports also and as well as referencing well-known Irish drink brands that were popular in Australia, she also mentioned that they were a buyer of Irish dairy and pigmeat products already.

High farmer expectations for divided US Congress
Newly elected US representatives and senators will need cross-party agreement to pass crucial agriculture policy and trade legislation.

The Democratic Party won a majority in the US House of Representatives while President Donald Trump's Republican Party retained control of the Senate in the mid-term elections held on Tuesday.

One of the first items on the agenda of the newly elected representatives and senators will be the Farm Bill, which sets rules and funding for American farmers in the same way as the CAP in Europe.

The previous Farm Bill expired on 30 September and proposed legislation to replace it has been bogged down in Congress, with the House and Senate passing different versions earlier this year. Democrats have opposed Republican cuts to the distribution of food stamps to people on social welfare, a nutrition programme providing for large-scale purchases from the agri-food industry.

The US government has provided emergency funding to plug the gap since October, but has also begun to wind down some farm schemes.

Trade deal

The US Congress must also approve the trade deal concluded by President Trump's administration with Mexico and Canada before it comes into effect. Farmers have been anxious for new export options after the trade war initiated by President Trump with China escalated tariffs for a range of US agri-food commodities.

Exclusive China deal for Origin Green milk
An agreement signed with manufacturer Wyeth links quality-assured Irish milk to a leading infant formula brand in China.

Bord Bia and Wyeth China signed a memorandum of understanding to guarantee Origin Green certification for all milk used in the company's Illuma infant formula products in China.

"The memorandum of understanding with Wyeth is a commitment by the company to source all of its dairy ingredients for its Illuma base brand exclusively from milk from Irish farms participating in Bord Bia's Sustainable Dairy Assurance Scheme under the Origin Green programme," Bord Bia announced this Tuesday.

Exports

According to the agency, Wyeth accounted for more than half of Ireland's €666.4m dairy exports to China last year. The company, which is part of the Nestlé group, operates the infant formula manufacturing plant in Askeaton, Co Limerick.

The agreement to source exclusively quality-assured Irish milk is worth €110m to the Irish dairy industry, Bord Bia estimated.

Promotion

Wyeth and Bord Bia have also agreed to share market data on China and promote Ireland as a sustainable food producer in the country.

“This agreement is very good news for the Irish dairy industry and a vote of confidence in the Irish food sector by one of its strategic partners committed to working with us on sharing insights on Chinese consumers and building awareness of Ireland's premium food offering in the market," said Bord Bia's chief executive Tara McCarthy.

The signing ceremony took place at the Chinese Import and Export Expo (CIIE) in Shanghai, where Bord Bia expects more deals to be concluded this week.

Wyeth Nutritionals reported strong growth underpinned by the Chinese infant formula market last year.

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