Dairy farm structure and its changes over the last 10 years – trends and drivers
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09/09/2015 © IFCN 2015 | 1
IDF Conference 2015 Lithuania
Dairy farm structure and its changes
over the last 10 years – trends and drivers
Wyrzykowski Łukasz
IFCN Dairy Research Network
lukasz.wyrzykowski@ifcndairy.org
09/09/2015 © IFCN 2015 | 2
Agenda
1. IFCN concept
2. Dairy farms worldwide
3. Analysis of the farm structure
4. Summary
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Mission:
We create a better understanding
of the dairy world by providing
comparable data,
knowledge and inspiration.
IFCN - The Global Dairy Research Network
The network approach – of a three pillars
- the network of researchers,
- the network of companies/institutions and
- the IFCN center with > 15 dairy economists.
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Research partners in 100 countries
Status of the IFCN Network in 2015
Supporting partners (> 100)
Institutional partners
57 Countries where we collect farm economic data & country data
43 Countries where we collect country profile data
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Activities
in the
different
months of
the year
IFCN - An ongoing knowledge creation system
IFCN Dairy Conference IFCN Supporter Conference
Data collection,
validation & analysis
Kick off meeting Kiel IFCN Regional Workshop
7
09/09/2015 © IFCN 2015 | 6
Agenda
1. IFCN concept
2. Dairy farms worldwide
3. Analysis of the farm structure
4. Summary
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Source: IFCN database
Where are the farms located?
Number of dairy farms 2014, incl. estimates
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
Total number of dairy farms in 2014: 121.5 million
+ 1% increase vs 2013
PK 7 mill
India 76 mill
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Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
Trends in farms development
Change in farm numbers 2009 - 2014
2009 – 117 mill dairy farms
2014 – 121 mill dary farms
2009 - 2014 = 3.8% increase
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13 countries with Ø farm size >100
difference of margin over compound feed cost to bound
January 2015 in %
>15%
>-15% <= 15%
<= -15%
no data
What is the average farm size in the world?
Milk animals per farm 2014 (cow & buffalo)
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
Ø farm size world: 2.9 cows
Countries with Ø farm size >100: DK, GB, CZ, CY, AR, UY, US,
AU, NZ, SA, IL, ZA, TW
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The dairy world 2004-2014
What are the main changes in world milk supply in last 10 years
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
* Data representing cow and buffalo milk only.
ECM- Energy Corrected Milk; 4% fat, 3.3% protein
2004 2014 Absolute % CAGR
%/ year
Milk Supply
Milk production* Mill t ECM 606 778 172 28.5% 2.5%
Supply Drivers
Number of milk
animalsMill head 319 363 44 13.7% 1.3%
Average milk yieldt / milk
animal / year1.9 2.15 0.2 13.0% 1.2%
Dairy farm number Mill 108 121 13 12.3% 1.2%
Average farm size Head/farm 2.8 2.9 0.1 2.3% 0.2%
Variables UnitChange 2004 vs 2014
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Agenda
1. IFCN concept
2. Dairy farms worldwide
3. Analysis of the farm structure
4. Summary
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For what do we need farm structure data? Meaning of farm dairy farm structure data to industry
• To better understand the regional & national structure of the
dairy farms
• To monitor the development pattern and dynamics
• To predict milk supply and pattern for farm input use
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IFCN approach to farm structure data From raw data to comparable data
Data for farms, cows and
production in IFCN
standard classes
Raw data allocated into IFCN’s 7
standard classes via allocation factors
100 Country Pages including farm structure data for 73 countries
Estimates for missing years
Comparable
data for 73
countries
Importancy of the IFCN Standard Classes:
• Standarization of national farm & cows classes
• Comparability of data between the countries
• Identification of specific farm groups
• Creation of aggregates
Germany
Dairy farms in 1,000 / size group
National Statistics 2014 Allocation factors for farms IFCN Standard Classes
x
1-9 11.2 1 - 2
10-19 11.3 >2 - 10
20-29 11.2 >10 - 30
30-49 14.4 x >30 - 100
50-99 18.4 >100 - 300
≥ 100 10.0 >300 - 1000
> 1000
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Farm ownership & their key drivers
Smaller farms - Household perspectives Key characteristics: Small farms 1-9 cows, dairy is one income source,
50% of the milk is consumed on the farm, 50% sold.
Key driver: Selling milk provides daily cash for family needs.
Medium size farms - Family labor perspective Key characteristics: Work is mainly done by the family,
Size in developed countries 10 up to 100 (can go up to 300)
Key driver: Generate an income.
Larger farms - Business perspective Key characteristics: Work is mainly done by employees,
Size in developed countries > 100 cows or more?
Key driver: Generate the expected ROI.
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Share of cows per size class in 2014
• IN: dominated via smaller
farms with household
perspective
• BR, PL, FR: dominated
via medium farms with
family labour perpectives
• US, NZ: dominated via
larger farms with a
bussines perspective
Cows in the world
Distribution in IFCN standard classes 2014
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
Note: average farm size refers to cows and buffaloes only
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
India Brazil Poland France US NZØ Herd
Size 2014: 2 21 8 55 181 410
Legend:
85%
56% 68%
80%
85%
99%
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What is dominating farm size category? The most dominant farm type in number of cows per country 2014
Source: IFCN Standard Classes based on national statistics and allocation factors. Data preliminary or est. for 2014:AM, AT, AU, AZ, BE, BG, CA, CH, CO, CR, CY, CZ, DK, DZ, EE,
ES, ET, HU, ID, IE, IN, IS, IT, JM, KG, KZ, LK, LU, MA, MK, MN, MX, MY, NG, NP, NZ, PH, PK, PT, RO, RS, RU, SA, SI, TH, TJ, TM, TR, TW, UK, US, UY, UZ, VN
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% Share in size classes
96.1% 59.8%
Smaller farms/
household
farms
3.6% 25.6% Medium farms/
family farms
0.3% 14.6%
17%
Farms Cows
Larger farms/
business farms
Source: IFCN Standard Classes based on national statistics and allocation factors. Data preliminary or est. for 2014: CH, IS, AT, BE, LU, DK, IE, IT, PT, ES, UK, CZ, SI, HU, EE, AM,
KZ, RU, ZU, BG, RO, RS, CO, UY, CA, US, AU, NZ, IN, PK, LK, TH, ET, NG, TW, DZ, KG, CY, AZ, TJ, NP and TR
A global picture of dairy farm structure
Analysis covers 95% of the countries in the world
73%
31%
23%
29%
11%
15%
6%
5% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dairy Farms Dairy cows
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Shares of cows per size classes
Distribution in IFCN standard classes 1996-2014
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
Ø herd size change 1996-2014: 2.0 - 1.7 9.0 - 22 72 - 182
Ø annual %-change in farm number: 2.8% -2.3% -3.4%
Brazil USA India
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Criteria for succesful dairy regions
Farm structure dynamics – cows / size class in 1,000’s
size classes, cows per farm:
Ø herd size change 1996-2014:
2.0 – 8.0 30 – 55 47– 166
Ø annual %-change in farm number:
-4.7% -3.1% -4.3%
0
200
400
600
800
1000
1200
1400
1600
1800
2000
19
96
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98
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00
20
02
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08
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10
20
12
20
14
Co
ws
pe
r h
erd
siz
e c
lass
in 1
,00
0s
Size classes, cows per farm 1 - 2 >2 - 10 >10 - 30 >30 - 100>100 - 300 >300 - 1000> 1000
1996-2014 CAGR: -10%
1996-2011 CAGR: 6.8%
0
500
1000
1500
2000
2500
3000
3500
19
96
19
98
20
00
20
02
20
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14
Size classes, cows per farm
1 - 2 >2 - 10 >10 - 30 >30 - 100>100 - 300 >300 - 1000> 1000
2001-2014 CAGR: -1.2%
1996-2014 CAGR: 9.4%
Poland France Denmark
0
50
100
150
200
250
300
350
400
450
19
96
19
98
20
00
20
02
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14
Size classes, cows per farm 1 - 2 >2 - 10 >10 - 30 >30 - 100>100 - 300 >300 - 1000> 1000
1996-2014 CAGR: -10%
2007-2014 CAGR:19%
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
09/09/2015 © IFCN 2015 | 20
Criteria for succesful dairy regions
Farm structure dynamics – cows / size class in 1,000’s
size classes, cows per farm:
Ø herd size change 1996-2014:
2.0 – 8.0 30 – 55 47– 166
Ø annual %-change in farm number:
-4.7% -3.1% -4.3%
0
200
400
600
800
1000
1200
1400
1600
1800
2000
19
96
19
98
20
00
20
02
20
04
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06
20
08
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10
20
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Co
ws
pe
r h
erd
siz
e c
lass
in 1
,00
0s
Size classes, cows per farm 1 - 2 >2 - 10 >10 - 30 >30 - 100>100 - 300 >300 - 1000> 1000
0
500
1000
1500
2000
2500
3000
3500
19
96
19
98
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00
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12
20
14
Size classes, cows per farm
1 - 2 >2 - 10 >10 - 30 >30 - 100>100 - 300 >300 - 1000> 1000
Poland France Denmark
0
50
100
150
200
250
300
350
400
450
19
96
19
98
20
00
20
02
20
04
20
06
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08
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20
12
20
14
Size classes, cows per farm 1 - 2 >2 - 10 >10 - 30 >30 - 100>100 - 300 >300 - 1000> 1000
Source: D3.2 - Dairy Sector Analysis with Base Line Projection 2025
09/09/2015 © IFCN 2015 | 21
Summary
a) Farm number:
• 121 mill farms; 2.9 cows/buffalos/farm is the world average farm size
(Range: India: 1.7 cow / farm, New Zealand: 410 cows / farm)
• Development pattern by developing country – more farms / smaller farms
• Development pattern by developed countries – less farms / larger farms
b) Status of farm structure:
• Small farms: 96% of the dairy farms keeping 60% world dairy cows and buffalos
• Medium farms: 3,6% of the dairy farms keeping 26% world dairy cows and buffalos
• Larger farms: 0,3% of the dairy farms keeping 15% world dairy cows and buffalos
c) Farm structure dynamics – a life cycle of a dairy farm
• No possibility to stop the consolidation of farm structure process in the long run
• How to act to the insure the milk supply in a region?
Cooperation inside dairy supply chain to guide dairy development
Finding future national dairy farming systems & support farmers to get there
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