South African Milk Processors Organisation

Transcription

1 South African Milk Processors Organisation The voluntary organisation of milk processors for the promotion of the development of the secondary dairy industry to the benefit of the dairy industry, the consumer and the South African society. This presentation is available to any interested party and copies can be obtained from the Office of SAMPRO telephone number Enquiries regarding the content of the presentation should be directed to Alwyn P Kraamwinkel, telephone number or Yvonne at yvonne@sampro.co.za

2 The international markets for dairy products The raw milk markets in major dairy countries The raw milk market in South Africa The South African markets for dairy products 2

3 Graph as published by the Food and Agricultural Organisation (FAO) of the United Nations. 3

4 MONTHLY PRICE INDICES OF DAIRY PRODUCTS IN THE INTERNATIONAL MARKET OF THE FAO ( =100) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Graph prepared by the Office of SAMPRO based on the figures as published by the Food and Agricultural Organisation (FAO) of the United Nations. 4

5 VOLATILITY PER YEAR OF THE PRICE INDEX OF THE FAO OF DAIRY PRODUCTS IN THE INTERNATIONAL MARKET YEAR A Highest Monthly Index B Lowest Monthly Index A Higher than B Percent Table prepared by the Office of SAMPRO based on information published by the FAO 5

6 1/2009 2/2009 3/2009 4/2009 5/2009 6/2009 7/2009 8/2009 9/ / / /2009 1/2010 2/2010 3/2010 4/2010 5/2010 6/2010 7/2010 8/2010 9/ / / /2010 1/2011 2/2011 3/2011 4/2011 5/2011 6/2011 7/2011 8/2011 9/ / / /2011 1/2012 2/2012 3/2012 4/2012 5/2012 6/2012 7/2012 8/2012 9/ / / /2012 1/2013 2/2013 3/2013 4/2013 5/2013 6/2013 7/2013 8/2013 9/ / / /2013 1/2014 2/2014 3/2014 4/2014 5/2014 6/2014 7/2014 8/2014 9/ / / /2014 1/2015 2/2015 The price history of different food products in the international market from 2009 to February 2015 FAO MONTHLY FOOD PRICE INDICES ( =100) Meat Price Index Dairy Price Index Cereals Price Index Vegetable Oil Price Index Sugar Price Index Graph prepared by the Office of SAMPRO based on information published by the FAO, in the Global Food Price Monitor 6

7 2007 Jan 2007 Feb 2007 Mar 2007 Apr 2007 May 2007 Jun 2007 Jul 2007 Aug 2007 Sep 2007 Oct 2007 Nov 2007 Dec 2008 Jan 2008 Feb 2008 Mar 2008 Apr 2008 May 2008 Jun 2008 Jul 2008 Aug 2008 Sep 2008 Oct 2008 Nov 2008 Dec 2009 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 Jun 2009 Jul 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Dec 2010 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2011 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 June 2011 July 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2012 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 June 2012 July 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2013 Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 June 2013 July 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2014 Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014 Nov 2014 Dec 2015 Jan 2015 Feb 6000 Average Oceania export prices up to February 2015 (USA $/ton f.o.b.) Butter Cheddar Cheese Full cream milk powder Skimmed milk powder Graph prepared by the Office of SAMPRO based on information published by the USDA 7

8 World market prices (F.O.B.) of certain dairy products in mid March 2015 Product Price $ / kg Price R / kg (R12.10=$) Butter Whole milk powder Skimmed milk powder Prices (F.O.B.) of certain dairy products from Oceania late in February 2015 Product Price $ / kg Price R / kg (R12.10=$) Butter Whole milk powder Skimmed milk powder Table 1 prepared by the Office of SAMPRO based on information published in the USDA Agricultural Marketing Service. The prices are free on board prices from Western Europe. Table 2 prepared by the Office of SAMPRO based on information published in the USDA Agricultural Marketing Service. The prices are free on board prices from Oceania. 8

9 70.00 Dairy product prices and future prices in the USA in Rand per kg (R12,10=$USA) Quarter IV Quarter I Quarter II Quarter III Quarter IV Quarter I Quarter II Quarter III Quarter IV Quarter I Quarter II Quarter III Quarter IV Cheddar cheese Butter Skimmed powder Graph prepared by the Office of SAMPRO based on information contained in the United States Department of Agriculture, Livestock, Dairy, and Poultry Outlook, 16 March

10 Prices (per ton) achieved by Global Dairy Trade Auction on 1 April 2015 for future delivery (R12.10 USA $) 2015 JUNE JULY AUGUST SEPTEMBER OCTOBER Whole Milk Powder PRICE: $ PRICE: R Index Skimmed Milk Powder PRICE: $ PRICE: R Index Cheddar Butter PRICE: $ n.a. n.a. n.a. PRICE: R n.a. n.a. n.a. Index n.a. n.a. n.a. PRICE: $ n.a n.a. n.a. PRICE: R n.a n.a. n.a. Index n.a n.a. n.a. Table prepared by the Office of SAMPRO based on prices as published by Global Dairy Trade. 10

11 Prominent characteristics of raw milk production in the world are : Highly dependant on climate conditions which are unpredictable. Raw milk production is seasonal with high production in summer and low production in winter. The season of peak production in the Northern hemisphere coincides with the season of low production in the Southern hemisphere and vice versa. 11

12 Seasonality of raw milk production in Northern and Southern hemispheres Graph prepared by the Office of SAMPRO based on information published by CLAL.it 12

13 Raw milk prices in the European Union Graph as published by LTO Nederland. 13

14 Raw milk prices in the USA Graph prepared by the Office of SAMPRO based on information published by CLAL.it 14

15 27.00 Raw milk prices and future raw milk prices ($/100lb) in the USA Quarter IV Quarter I Quarter II Quarter III Quarter IV Quarter I Quarter II Quarter III Quarter IV Quarter I Quarter II Quarter III Quarter IV All milk Class III Class IV Graph prepared by the Office of SAMPRO based on information published in the United States Department of Agriculture publication titled Livestock, Dairy and Poultry Outlook, 17 February Class III milk is used for the production of cheese and Class IV is used for the manufacture of butter and milk powder. 15

16 Total quantity of raw milk purchased in South Africa during the years 2008 to 2014 YEAR RAW MILK KILOGRAM PERCENTAGE CHANGE FROM PREVIOUS YEAR INDEX 2008 = Table prepared by the Office of SAMPRO based on information obtained from Milk SA 16

17 Total raw milk purchases in South Africa in the years 2008 to 2015 (Average per day per month) Index: January 2008 = Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Graph prepared by the Office of SAMPRO based on information obtained from Milk SA 17

18 Index of monthly raw milk purchases (average per day per month) in South Africa in the years 2008 to 2015 Index January 2008 = Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Table prepared by the Office of SAMPRO on the basis of information obtained from MILK SA 18

19 Increase in monthly raw milk purchases in South Africa from July to August, July to September and July to October of each of the years 2008 to 2014 Year July to August Percent July to September Percent July to October Percent Table prepared by the Office of SAMPRO based on information obtained from MILK SA 19

20 Raw milk purchases in South Africa in particular months relative to the purchases in the same months of the previous years Percentage increase July 2014 relative to July August 2014 relative to August September 2014 relative to September October 2014 relative to October November 2014 relative to November December 2014 relative to December January 2015 relative to January February 2015 relative to February Table prepared by the Office of SAMPRO based on information obtained from MILK SA 20

21 Difference between the highest and lowest production of raw milk per day in South Africa in the years 2008 to 2014 Year Percent Table prepared by the Office of SAMPRO based on information obtained from MILK SA 21

22 Producer price index of raw milk in South Africa Index 2000 = Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Graph prepared by the Office of SAMPRO and is based on the price index of Department of Agriculture, Forestry and Fisheries with base year 2000 and from January 2007 the change in the index is as reflected by the producer price index as published by Statistics SA. Statistics SA publishes the index monthly while Agriculture issues figures on a quarterly basis. 22

23 Difference between the highest and lowest producer price index of raw milk in each of the years 2008 to 2014 YEAR DIFFERENCE PERCENT , , , , , , ,1 23

24 Future prices of yellow maize in South Africa on 1 April 2015 according to SAFEX CLOSING BID July September December Table prepared by the Office of SAMPRO based on information as obtained from Safex website on 1 April

25 Future prices of soybeans in South Africa on 1 April 2015 according to SAFEX CLOSING BID July September December Table prepared by the Office of SAMPRO based on information as obtained from Safex website on 1 April

26 INCREASE IN THE PRODUCER PRICE INDICES OF AGRICULTURAL PRODUCTS IN SOUTH AFRICA FROM JANUARY 2015 TO FEBRUARY 2015 INDEX 2012 = 100 Product Index in January 2015 Index in February 2015 Percentage increase Cereal and other crops Milk (raw ) Other animal products Fruit and Vegetables Live animals Table prepared by the Office of SAMPRO based on information published by Statistics SA. 26

27 INCREASE IN THE PRODUCER PRICE INDICES OF AGRICULTURAL PRODUCTS IN SOUTH AFRICA IN THE 12 MONTHS UP TO FEBRUARY 2015 INDEX 2012 = 100 Product Index in February 2014 Index in February 2015 Percentage increase Milk (raw ) Live animals Other animal products Fruit and Vegetables Cereal and other crops Table prepared by the Office of SAMPRO based on information published by Statistics SA. 27

28 INCREASE IN THE PRODUCER PRICE INDICES OF AGRICULTURAL PRODUCTS IN SOUTH AFRICA IN THE 37 MONTHS FROM JANUARY 2012 TO FEBRUARY 2015 INDEX 2012 = 100 Product Index in January 2012 Index in February 2015 Percentage increase Milk (raw ) Fruit and Vegetables Cereal and other crops Other animal products Live animals Table prepared by the Office of SAMPRO based on information published by Statistics SA. 28

29 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb Producer price index of all primary agricultural products and that of specific primary agricultural products from January 2012 to February 2015 Index 2012 = All Primary Agricultural products Live Animals Cereals and other crops Fruit and vegetables Other animal products Raw Milk Graph prepared by the Office of SAMPRO based on information published by Statistics SA. 29

30 Increase in the producer price indices of raw milk and dairy products INDEX 2012 = 100 Raw milk Percentage increase Dairy Products Percentage increase January to February Months (February 2014 February 2015) Months (January 2012 February 2015) Table prepared by the Office of SAMPRO based on information published by Statistics SA. 30

31 Feb-03 Apr-03 Jun-03 Aug-03 Oct-03 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb Producer price index of raw milk and the producer price index of dairy products from February 2003 to February 2015 Index: 2000 = Dairy Products Raw Milk Graph prepared by the Office of SAMPRO based on information published by the Department of Agriculture and Statistics SA. 31

32 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb Producer price index of raw milk and the producer price index of dairy products from January 2012 to February 2015 Index: 2012 = Raw Milk Dairy Products Graph prepared by the Office of SAMPRO based on information published by Statistics SA. 32

33 In 2014: South Africa was in terms of mass, a net exporter of 2 of the 6 types of dairy products just like in 2010, 2011 and Total export (mass) in 2014 was higher than in previous 12 years. Total import (mass) in 2014 was higher in 10 of the previous 12 years. 33

34 Mass of export of 4 of the 6 types of dairy products higher than in previous 10 years. Mass of import of none of the 6 types of dairy products was a record relative to previous 10 years. The average export prices of 5 of the 6 dairy products in 2014 were higher than in the previous 10 years. The average import prices of each of the 6 types of dairy products in 2013 were higher than in

35 Exposure of the South African dairy industry to international competition (Index of the sum of the mass of imports and exports Index: 2002 = 100) YEAR IMPORT EXPORT IMPORT PLUS EXPORT TON INDEX TON INDEX TON INDEX Table prepared by the Office of SAMPRO based on information published by SARS 35

36 MASS OF IMPORT AS PERCENTAGE OF THE MASS OF EXPORT OF DAIRY PRODUCTS BY SOUTH AFRICA Tariff Heading Product Milk and cream Concentrated milk Buttermilk and yoghurt Whey Butter Cheese TOTAAL Table prepared by the Office of SAMPRO based on information published by SARS 36

37 Quantity and price of South Africa s import and export of milk and cream (04.01) Kg 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000, (Milk and Cream) Import kg 0401 Export kg Import R fob/kg Export R fob/kg R/kg Graph prepared by the Office of SAMPRO based on information published by SARS 37

38 Quantity and price of South Africa s import and export of concentrated milk (04.02) Kg 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000, (Concentrated Milk) Import kg 0402 Export kg Import R fob/kg Export R fob/kg R/kg Graph prepared by the Office of SAMPRO based on information published by SARS 38

39 Quantity and price of South Africa s import and export of buttermilk and yoghurt (04.03) Kg 25,500, (Buttermilk & Yoghurt) R/kg ,500, ,500,000 10,500, ,500, , Import kg 0403 Export kg Import R fob/kg Export R fob/kg 5.00 Graph prepared by the Office of SAMPRO based on information published by SARS 39

40 Quantity and price of South Africa s import and export of whey (04.04) Kg 12,000, (Whey) R/kg ,000,000 8,000, ,000, ,000,000 2,000, Import kg 0404 Export kg Import R fob/kg Export R fob/kg 0.00 Graph prepared by the Office of SAMPRO based on information published by SARS 40

41 Quantity and price of South Africa s import and export of butter (04.05) Kg 7,000, (Butter) R/kg ,000,000 5,000,000 4,000, ,000,000 2,000,000 1,000, Import kg 0405 Export kg Import R fob/kg Export R fob/kg Graph prepared by the Office of SAMPRO based on information published by SARS 41

42 Quantity and price of South Africa s import and export of cheese and curd (04.06) Kg 14,000,000 12,000, (Cheese and Curd) R/kg ,000, ,000, ,000,000 4,000,000 2,000, Import kg 0406 Export kg Import R fob/kg Export R fob/kg Graph prepared by the Office of SAMPRO based on information published by SARS 42

43 Producer price index of dairy products Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Graph prepared by the Office of SAMPRO based on information published by Statistics SA 43

44 The differences between the highest and lowest producer price index of dairy products in South Africa in each of the years 2008 to Year Difference Percent Graph prepared by the Office of SAMPRO based on information published by Statistics SA 44

45 INCREASE IN THE PRODUCER PRICE INDICES OF MANUFACTURED FOOD IN SOUTH AFRICA FROM JANUARY 2015 TO FEBRUARY 2015 INDEX 2012 = 100 Product Index in January 2015 Index in February 2015 Percentage increase Sugar Grain mill products Bakery products Dairy products Starches, starch products and animal feed Other food products Fruits and vegetable products Meat and meat products Oils and fats Table prepared by the Office of SAMPRO based on information published by Statistics SA. 45

46 INCREASE IN THE PRODUCER PRICE INDICES OF MANUFACTURED FOOD IN SOUTH AFRICA IN THE 12 MONTHS UP TO FEBRUARY 2015 INDEX 2012 = 100 Product Index in February 2014 Index in February 2015 Percentage increase Meat and meat products Dairy products Bakery products Other food products Sugar Fruits and vegetable products Starches, starch products and animal feed Grain mill products Oils and fats Table prepared by the Office of SAMPRO based on information published by Statistics SA. 46

47 INCREASE IN THE PRODUCER PRICE INDICES OF MANUFACTURED FOOD IN SOUTH AFRICA IN THE 37 MONTHS FROM JANUARY 2012 TO FEBRUARY 2015 INDEX 2012 = 100 Product Index in January 2012 Index in February 2015 Percentage increase Dairy products Bakery products Starches, starch products and animal feed Meat and meat products Fruits and vegetable products Oils and fats Grain mill products Other food products Sugar Table prepared by the Office of SAMPRO based on information published by Statistics SA. 47

48 Feb-00 Apr-00 Jun-00 Aug-00 Oct-00 Dec-00 Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Dec-01 Feb-02 Apr-02 Jun-02 Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03 Aug-03 Oct-03 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb Producer price indices of dairy products, food products and all South African products from February 2000 to February 2015 Index: 2000= All SA products FOOD Dairy Products Graph prepared by the Office of SAMPRO based on information published by Statistics SA 48

49 The performance of dairy products in the South African consumer market up to 2014 can be summarised as follows : a) On a very general level of analysis, the available information shows that : - The performance (quantity of sales and retail price) of the different dairy products, differ meaningfully; - The performance of any particular dairy product can change meaningfully during a period of even as short as a few months; - Periods of increased prices often coincide with periods of decreased quantity of sales, and vice versa; Continue 49

50 ...continue b) The consumer demand (quantity of sales) of 8 of the 9 dairy products covered by the survey, was in the year which ended in December 2014, higher than in the previous year; c) The retail prices of 8 of the 9 dairy products increased in the year which ended in December 2014 more than the inflation rate. 50

51 CHANGES IN THE RETAIL DEMAND FROM THE YEAR JANUARY 2013 TO DECEMBER 2013 TO THE YEAR JANUARY 2014 TO DECEMBER 2014 AND CHANGES IN THE RETAIL PRICES FROM DECEMBER 2013 TO DECEMBER 2014 PRODUCT CHANGE IN DEMAND (QUANTITY) PERCENT CHANGE IN RETAIL PRICES PERCENT Fresh Milk Long Life Milk (UHT Milk) Flavoured Milk Yoghurt Maas Pre-packaged Cheese Cream Cheese Butter Cream Table prepared by the Office of SAMPRO based on the results of surveys by The Nielsen Company. Non-retail sales such as sales to industrial buyers are not part of the surveys. 51

52 Changes in the quantities of retail sales of certain dairy products Sales in the month of December 2014 Sales in the 3 months from October 2014 to December 2014 Sales in the 6 months from July 2014 to December 2014 Sales in the 9 months from April 2014 to December 2014 Sales in the 12 months from January 2014 to December 2014 PRODUCT versus the sales in the month of December 2013 versus the sales in the 3 months from October 2013 to December 2013 versus the sales in the 6 months from July 2013 to December 2013 versus the sales in the 9 months from April 2013 to December 2013 versus the sales in the 12 months from January 2013 to December 2013 percent percent percent Fresh Milk UHT milk Flavoured milk Yoghurt Maas Pre-packaged cheese Cream cheese Butter Cream Table prepared by the Office of SAMPRO based on the results of surveys by The Nielsen Company. Non-retail sales such as sales to industrial buyers are not part of the surveys. 52

53 The average retail prices of certain dairy products in December 2014 compared to the average retail prices of the products concerned in certain previous months of 2013 and PRODUCT December 2014 versus November 2014 (1 month ago) December 2014 versus September 2014 (3 months ago) December 2014 versus June 2014 (6 months ago) December 2014 versus March 2014 (9 months ago) December 2014 versus December 2013 (12 months ago) December 2014 versus June 2013 (18months ago) December 2014 versus December 2012 (24 months ago) Percent Percent Percent Percent Percent Percent Percent Fresh Milk UHT milk Flavoured milk Yoghurt Maas Pre-packaged cheese Cream cheese Butter Cream Table prepared by the Office of SAMPRO based on the results of surveys by The Nielsen Company. Non-retail sales such as sales to industrial buyers are not part of the surveys. 53

54 Changes in the quantities of retail sales of certain dairy products and some other generally consumed food products. Sales in the 12 months from January 2014 to December 2014 Product versus the sales in the 12 months from January 2013 to December 2013 % Ranking Pre-Packaged Cheese Cream Rice Maas Long Life Milk Coffee Yoghurt Butter Instant Cereal Fresh Milk Bread Cream Cheese Margarine Tea Flavoured Milk Maize Meal Short Life Juice Table prepared by the Office of SAMPRO based on the results of surveys by The Nielsen Company. Non-retail sales are not part of the surveys. 54

55 In the rest of 2015, the performance of the South African dairy industry will be shaped by especially: - The economic growth rate of South Africa; - The weather conditions which can not be predicted; - Conditions in the international markets for dairy products. Two important questions - Will the very good performance of South African dairy products in the retail market continue? - Will the demand be sufficient to absorb the supply in the second half of 2015, if the high production in the last 5 months continue? The rest of 2015 should be approached with caution and key variables continually assessed. 55