Dairy outlook conference IFCN: Data is key to tame the waves

IFCN supporter conference - the future of dairy

34% more milk per farm, 29% more milk per animal and 63% more milk produced in the world. Just a few numbers on how the dairy industry improved itself over the last 20 years. But what’s up for the next 2 decades?

This was one of the major topics, discussed at the 17th IFCN Supporter Conference was held in Brno, Czech Republic, 17-19th September. This annual event has become the leading global think tank for the dairy sector and a knowledge exchange platform for dairy related companies. This year around 100 participants from over 65 companies focused on the global dairy perspectives 2040 and “Different types of milk – Complexity, Challenges & Opportunities”. Connecterra is also a supporter of the IFCN and attended the conference to be part of the discussion with its fellow IFCN supporters.

20 years of efficiency steps

IFCN, well-known for the market insights, shared the latest data regarding expected dairy production. The IFCN experts addressed that the dairy industry has gone through an impressive efficiency transformation in the last 20 years. Over the last couple of decades, global dairy supply grew by 63% and the production per cow per year increased with 29%. This goes hand in hand with consolidation of farms. The smaller household farms (1-10 cows) are decreasing in numbers by 1.7% per year since 2012. Still, the world has over 100 million of these small dairy farms. There are 600,000 so-called family farms (10-100 cows). Also, this farm type is declining (with 3% per year since 2008). An increase is seen in the business farms (>100 cows). Currently there are 200,000 of such farms and the number is increasing with 1.3% per year since 2012. The IFCN addressed that especially in China the growth in large farms (with more than 1,000 cows) is increasing.

Are consumers abandoning milk?

Despite the growth of dairy production and consumption in most regions of the world, the sector is faced with a number of challenges. One of them is the discussion about the health of dairy products and their position in the human diet. Over the last couple of years, a meteoric rise of companies started to sell oat and nut milks and suggesting that traditional milk is facing a major battle. In 2018, 4 % of the total EU milk consumption was represented by plant-based alternatives. Although these type of drinks are gaining popularity – yet an exit from milk as source of protein is not expected, according to IFCN. On the contrary, IFCN even foresees an increased demand for dairy products in the long-term. The conference attendees agreed that transparency and fact-based information are key to address the challenges connected with different types of milk as well as plant-based beverages.

A wave or a tsunami?

Looking into the future is always hard, especially for volatile agricultural markets such as dairy. This is because the sector is challenged and driven by several factors such as free trade agreements, protectionism, the rise of dairy alternatives, animal diseases (ASF effect on dairy market), climate change, adverse weather effects and more. Nevertheless, there is a good understanding where the market is heading. The IFCN predicts that the world milk supply will grow with another 1.7% in 2040 (compared to 2018). The global dairy consumption will grow with 0.8%. The average farm size (cows per farm) will increase with 1.5% in the coming decades.

But to make this growth happen, the dairy industry needs to be prepared to respond to the challenges such as changing supply conditions and demand patterns. The rise of dairy alternatives for example can be seen as waves, according to one of the speakers at the conference. But not all waves turn into tsunamis. The dairy industry has to learn to surf to be able to tame the waves. This can be done through transparency based on coordination of the dairy sector and technology and data solutions (such as Ida). Take circularity of cows and milk production for example. This is often misunderstood among the general public and the dairy sector needs to better present the perspective. In the end it all comes back to sustainability, one of the key topics in the dairy industry, now and in the future. Then no single wave will ever turn into a tsunami and the dairy sector continues to have a license to produce.

About the IFCN

The IFCN has been a well-known data research company for 20 years already, developing valuable market insights about the global dairy industry, prices and trends per country. The IFCN helps professionals in the dairy sector with dairy data, knowledge and inspiration to make better decisions. The IFCN network has grown to 141 supporting partners today, consisting of companies that are active in dairy processing, breeding, milk testing, feeding, animal health, research, finance, equipment, machinery, and technology. The 18th IFCN Supporter Conference will take place in September 2020 in Israel.

IFCN supporter conference - the future of dairy

By Emmy Koeleman, Global Market Communications Manager at Connecterra.