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 012 991 4164. Enquiries regarding the content of the presentation should be directed to Alwyn P Kraamwinkel, telephone number 012 991 4164 or Yvonne at yvonne@sampro.co.za
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
Graph as published by the Food and Agricultural Organisation (FAO) of the United Nations. 3
MONTHLY PRICE INDICES OF DAIRY PRODUCTS IN THE INTERNATIONAL MARKET OF THE FAO (2002-2004=100) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 149 155 164 183 191 220 247 259 269 270 272 264 2008 256 254 252 247 244 247 245 230 205 186 162 148 2009 130 121 123 124 131 132 136 139 153 169 218 223 2010 207 200 192 207 213 206 205 203 205 213 215 215 2011 227 241 246 239 240 241 238 232 225 216 210 208 2012 211 207 200 187 178 176 177 183 197 202 204 206 2013 211 211 228 257 252 246 244 248 251 252 251 264 2014 268 275 268 251 239 236 226 201 188 184 178 174 2015 174 182 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
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 2000 104 89 16.8 2001 111 101 9.9 2002 95 72 31.9 2003 105 89 17.9 2004 133 107 24.2 2005 138 134 2.9 2006 145 126 15.0 2007 272 149 82.5 2008 256 148 72.9 2009 223 121 84.2 2010 215 192 11.9 2011 246 208 18.2 2012 211 176 19.8 2013 264 211 25.1 2014 275 174 58.0 Table prepared by the Office of SAMPRO based on information published by the FAO 5
1/2009 2/2009 3/2009 4/2009 5/2009 6/2009 7/2009 8/2009 9/2009 10/2009 11/2009 12/2009 1/2010 2/2010 3/2010 4/2010 5/2010 6/2010 7/2010 8/2010 9/2010 10/2010 11/2010 12/2010 1/2011 2/2011 3/2011 4/2011 5/2011 6/2011 7/2011 8/2011 9/2011 10/2011 11/2011 12/2011 1/2012 2/2012 3/2012 4/2012 5/2012 6/2012 7/2012 8/2012 9/2012 10/2012 11/2012 12/2012 1/2013 2/2013 3/2013 4/2013 5/2013 6/2013 7/2013 8/2013 9/2013 10/2013 11/2013 12/2013 1/2014 2/2014 3/2014 4/2014 5/2014 6/2014 7/2014 8/2014 9/2014 10/2014 11/2014 12/2014 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 (2002-2004=100) 410.0 360.0 310.0 260.0 210.0 160.0 110.0 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
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.) 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 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
World market prices (F.O.B.) of certain dairy products in mid March 2015 Product Price $ / kg Price R / kg (R12.10=$) Butter 3.40-3.65 41.14-44.17 Whole milk powder 2.85-3.20 34.49-38.72 Skimmed milk powder 2.15-2.45 26.02-29.65 Prices (F.O.B.) of certain dairy products from Oceania late in February 2015 Product Price $ / kg Price R / kg (R12.10=$) Butter 3.80-4.15 45.98-50.22 Whole milk powder 3.18-3.80 38.48-45.98 Skimmed milk powder 2.75-3.05 33.28-36.91 Table 1 prepared by the Office of SAMPRO based on information published in the USDA Agricultural Marketing Service. The prices are free on board prices from Western Europe. Table 2 prepared by the Office of SAMPRO based on information published in the USDA Agricultural Marketing Service. The prices are free on board prices from Oceania. 8
70.00 Dairy product prices and future prices in the USA in Rand per kg (R12,10=$USA) 65.00 60.00 55.00 50.00 45.00 40.00 35.00 30.00 25.00 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 2012 2013 2014 2015 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 2015 9
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: $ 2469 2575 2595 2580 2592 PRICE: R 29875 31158 31400 31218 31363 Index 100 104.3 105.1 104.5 105.0 Skimmed Milk Powder PRICE: $ 2430 2647 2611 2416 2384 PRICE: R 29403 32029 31593 29234 28846 Index 100 108.9 107.4 99.4 98.1 Cheddar Butter PRICE: $ 2780 2795 n.a. n.a. n.a. PRICE: R 33638 33820 n.a. n.a. n.a. Index 100 100.5 n.a. n.a. n.a. PRICE: $ n.a. 3205 3380 n.a. n.a. PRICE: R n.a. 38781 40898 n.a. n.a. Index n.a. 100 105.5 n.a. n.a. Table prepared by the Office of SAMPRO based on prices as published by Global Dairy Trade. 10
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
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
Raw milk prices in the European Union Graph as published by LTO Nederland. 13
Raw milk prices in the USA Graph prepared by the Office of SAMPRO based on information published by CLAL.it 14
27.00 Raw milk prices and future raw milk prices ($/100lb) in the USA 25.00 23.00 21.00 19.00 17.00 15.00 13.00 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 2012 2013 2014 2015 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 2015. Class III milk is used for the production of cheese and Class IV is used for the manufacture of butter and milk powder. 15
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 = 100 2008 2 624 511 678 2.50 100.00 2009 2 586 868 067-1.43 98.57 2010 2 711 236 032 4.81 103.30 2011 2 720 402 147 0.34 103.65 2012 2 842 810 159 4.50 108.32 2013 2 905 811 947 2.22 110.72 2014 2 982 734 597 2.65 113.65 Table prepared by the Office of SAMPRO based on information obtained from Milk SA 16
140.00 130.00 Total raw milk purchases in South Africa in the years 2008 to 2015 (Average per day per month) Index: January 2008 = 100 128.31 134.09 132.39 128.49 120.00 120.02 113.21 114.06 110.00 109.56 100.00 103.64 99.20 97.41 98.31 98.79 100.90 90.00 80.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 2009 2010 2011 2012 2013 2014 2015 Graph prepared by the Office of SAMPRO based on information obtained from Milk SA 17
Index of monthly raw milk purchases (average per day per month) in South Africa in the years 2008 to 2015 Index January 2008 = 100 2008 2009 2010 2011 2012 2013 2014 2015 Jan 100.00 102.01 103.25 106.99 106.41 107.73 109.56 120.02 Feb 93.36 93.21 96.74 99.59 101.25 104.65 103.64 113.21 Mar 91.97 88.28 93.10 92.88 98.18 100.41 99.20 Apr 87.12 84.84 90.14 90.46 95.30 97.29 97.41 May 86.25 84.99 90.19 89.73 96.42 97.58 98.31 Jun 90.06 83.74 89.29 90.06 96.91 97.75 98.79 Jul 90.07 87.57 95.04 92.39 97.86 100.04 100.90 Aug 99.79 98.44 104.23 102.20 107.96 111.45 114.06 Sep 110.07 109.04 113.83 116.68 119.17 123.07 128.31 Oct 112.23 113.26 118.05 118.44 122.92 126.40 134.09 Nov 113.76 112.49 116.80 115.97 121.79 124.69 132.39 Dec 106.07 108.87 112.12 111.82 114.78 119.69 128.49 Table prepared by the Office of SAMPRO on the basis of information obtained from MILK SA 18
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 2008 10.7 22.2 24.6 2009 12.4 24.5 29.3 2010 9.7 19.8 24.2 2011 10.6 26.3 28.2 2012 10.3 21.8 25.6 2013 11.4 23.0 26.3 2014 13.0 27.2 32.9 Table prepared by the Office of SAMPRO based on information obtained from MILK SA 19
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 2013 0.8 August 2014 relative to August 2013 2.3 September 2014 relative to September 2013 4.3 October 2014 relative to October 2013 6.1 November 2014 relative to November 2013 6.2 December 2014 relative to December 2013 7.4 January 2015 relative to January 2014 9.5 February 2015 relative to February 2014 9.2 Table prepared by the Office of SAMPRO based on information obtained from MILK SA 20
Difference between the highest and lowest production of raw milk per day in South Africa in the years 2008 to 2014 Year Percent 2008 31.8 2009 35.2 2010 32.2 2011 32.0 2012 29.0 2013 29.0 2014 37.7 Table prepared by the Office of SAMPRO based on information obtained from MILK SA 21
350.0 342.9 346.9 Producer price index of raw milk in South Africa Index 2000 = 100 338.2 335.7 342.9 330.0 315.2 310.0 300.4 301.5 301.8 302.1 290.0 281.1 287.5 275.0 287.4 281.1 280.5 270.0 250.0 230.0 250.4 250.5 241.3 236.1 228.8 231.8 227.5 222.1 214.6 258.2 247.4 239.1 239.3 244.4 241.8 242.9 239.6 228.3 236.0 216.3 210.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 2009 2010 2011 2012 2013 2014 2015 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
Difference between the highest and lowest producer price index of raw milk in each of the years 2008 to 2014 YEAR DIFFERENCE PERCENT 2008 14,3 2009 13,6 2010 14,2 2011 6,9 2012 16,2 2013 8,4 2014 14,1 23
Future prices of yellow maize in South Africa on 1 April 2015 according to SAFEX CLOSING BID July 2015 2 453 September 2015 2 493 December 2015 2 523 Table prepared by the Office of SAMPRO based on information as obtained from Safex website on 1 April 2015 24
Future prices of soybeans in South Africa on 1 April 2015 according to SAFEX CLOSING BID July 2015 4 941 September 2015 5 005 December 2015 5 085 Table prepared by the Office of SAMPRO based on information as obtained from Safex website on 1 April 2015 25
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 101.3 110.6 9.2 Milk (raw ) 122.5 123.9 1.1 Other animal products 110.1 109.4-0.6 Fruit and Vegetables 110.3 109.2-1.0 Live animals 105.2 101.7-3.3 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 26
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 ) 109.0 123.9 13.7 Live animals 89.6 101.7 13.5 Other animal products 112.8 109.4-3.0 Fruit and Vegetables 119.6 109.2-8.7 Cereal and other crops 123.3 110.6-10.3 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 27
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 ) 90.6 123.9 36.8 Fruit and Vegetables 96.6 109.2 13.0 Cereal and other crops 99.7 110.6 10.9 Other animal products 103.9 109.4 5.3 Live animals 109.1 101.7-6.8 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 28
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-15 140.0 Producer price index of all primary agricultural products and that of specific primary agricultural products from January 2012 to February 2015 Index 2012 = 100 130.0 120.0 110.0 100.0 90.0 80.0 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
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 2015 1.1 0.8 12 Months (February 2014 February 2015) 13.7 11.3 37 Months (January 2012 February 2015) 36.8 33.7 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 30
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-15 350 Producer price index of raw milk and the producer price index of dairy products from February 2003 to February 2015 Index: 2000 = 100 300 250 200 150 100 Dairy Products Raw Milk Graph prepared by the Office of SAMPRO based on information published by the Department of Agriculture and Statistics SA. 31
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-15 130.0 Producer price index of raw milk and the producer price index of dairy products from January 2012 to February 2015 Index: 2012 = 100 125.0 120.0 115.0 110.0 105.0 100.0 95.0 90.0 85.0 80.0 Raw Milk Dairy Products Graph prepared by the Office of SAMPRO based on information published by Statistics SA. 32
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 2012. 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
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 2012. 34
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 2002 24 617.40 100.0 34 328.20 100.0 58 945.60 100.0 2003 24 458.80 99.4 22 905.20 66.7 47 364.00 80.4 2004 18 289.50 74.3 23 508.10 68.5 41 797.60 70.9 2005 30 771.40 125.0 17 216.00 50.2 47 987.40 81.4 2006 30 878.60 125.4 26 543.30 77.3 57 421.90 97.4 2007 44 313.00 180.0 18 516.50 53.9 62 829.50 106.6 2008 34 009.40 138.2 42 781.00 124.6 76 790.40 130.3 2009 32 373.40 131.5 41 770.70 121.7 74 144.10 125.8 2010 35 061.20 142.4 33 950.60 98.9 69 011.80 117.1 2011 37 714.40 153.2 41 817.10 121.8 79 531.50 134.9 2012 59 012.55 239.7 52 500.96 152.9 111 513.49 189.2 2013 35 673.76 144.9 70 481.90 205.3 106 155.66 180.1 2014 40 199.03 163.3 71 098.95 207.1 111 297.98 188.8 Table prepared by the Office of SAMPRO based on information published by SARS 35
MASS OF IMPORT AS PERCENTAGE OF THE MASS OF EXPORT OF DAIRY PRODUCTS BY SOUTH AFRICA Tariff Heading Product 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 04.01 Milk and cream 24.2 39.4 190.4 66.3 51.2 63.7 40.0 54.3 14.7 21.4 04.02 Concentrated milk 350.7 206.8 339.7 51.1 68.5 146.8 109.0 199.3 46.5 117.3 04.03 Buttermilk and yoghurt 56.9 31.4 41.3 11.7 24.2 30.5 23.1 16.6 8.2 9.2 04.04 Whey 5 892.2 321.2 460.8 228.6 162.5 191.0 752.1 669.5 452.7 507.4 04.05 Butter 321.5 407.6 378.5 179.7 244.4 149.1 317.8 591.1 266.7 111.4 04.06 Cheese 354.5 306.9 552.7 302.4 301.2 303.9 293.2 536.5 286.6 281.2 TOTAAL 178.7 116.3 239.3 79.5 77.5 103.3 90.2 112.4 50.6 56.5 Table prepared by the Office of SAMPRO based on information published by SARS 36
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 5,000,000-0401 (Milk and Cream) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0401 Import kg 0401 Export kg Import R fob/kg Export R fob/kg R/kg 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Graph prepared by the Office of SAMPRO based on information published by SARS 37
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 2,000,000-0402 (Concentrated Milk) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0402 Import kg 0402 Export kg Import R fob/kg Export R fob/kg R/kg 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 Graph prepared by the Office of SAMPRO based on information published by SARS 38
Quantity and price of South Africa s import and export of buttermilk and yoghurt (04.03) Kg 25,500,000 0403 (Buttermilk & Yoghurt) R/kg 45.00 20,500,000 40.00 35.00 15,500,000 10,500,000 30.00 25.00 20.00 5,500,000 15.00 10.00 500,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0403 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
Quantity and price of South Africa s import and export of whey (04.04) Kg 12,000,000 0404 (Whey) R/kg 40.00 10,000,000 8,000,000 35.00 30.00 25.00 6,000,000 20.00 4,000,000 2,000,000 15.00 10.00 5.00-2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0404 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
Quantity and price of South Africa s import and export of butter (04.05) Kg 7,000,000 0405 (Butter) R/kg 55.00 6,000,000 5,000,000 4,000,000 50.00 45.00 40.00 35.00 3,000,000 2,000,000 1,000,000 30.00 25.00 20.00 15.00-2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0405 Import kg 0405 Export kg Import R fob/kg Export R fob/kg 10.00 Graph prepared by the Office of SAMPRO based on information published by SARS 41
Quantity and price of South Africa s import and export of cheese and curd (04.06) Kg 14,000,000 12,000,000 0406 (Cheese and Curd) R/kg 65.00 10,000,000 55.00 8,000,000 45.00 6,000,000 4,000,000 2,000,000 35.00 25.00-2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0406 Import kg 0406 Export kg Import R fob/kg Export R fob/kg 15.00 Graph prepared by the Office of SAMPRO based on information published by SARS 42
Producer price index of dairy products 290.0 280.0 277.7 280.0 274.3 280.0 274.1 278.1 270.0 260.0 250.0 240.0 250.9 233.4 257.9 238.2 247.0 249.1 240.9 235.8 235.0 235.0 230.0 226.6 220.0 210.0 200.0 190.0 215.5 215.3 208.4 208.4 209.8 211.6 212.6 210.3 207.8 207.5 206.2 206.2 203.4 207.3 200.5 200.4 206.9 190.0 202.4 199.1 199.8 196.2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 2009 2010 2011 2012 2013 2014 2015 Graph prepared by the Office of SAMPRO based on information published by Statistics SA 43
The differences between the highest and lowest producer price index of dairy products in South Africa in each of the years 2008 to 2014. Year Difference Percent 2008 6.5 2009 4.1 2010 1.6 2011 4.4 2012 9.4 2013 6.7 2014 11.5 Graph prepared by the Office of SAMPRO based on information published by Statistics SA 44
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 103.8 107.0 3.1 Grain mill products 108.5 110.7 2.0 Bakery products 122.5 124.2 1.4 Dairy products 122.3 123.3 0.8 Starches, starch products and animal feed 117.4 117.8 0.3 Other food products 110.4 110.6 0.2 Fruits and vegetable products 114.2 114.1-0.1 Meat and meat products 126.3 125.7-0.5 Oils and fats 111.0 109.2-1.6 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 45
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 111.7 125.7 12.5 Dairy products 110.8 123.3 11.3 Bakery products 115.5 124.2 7.5 Other food products 103.4 110.6 7.0 Sugar 100.5 107.0 6.5 Fruits and vegetable products 107.3 114.1 6.3 Starches, starch products and animal feed 117.3 117.8 0.4 Grain mill products 110.8 110.7-0.1 Oils and fats 113.4 109.2-3.7 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 46
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 92.2 123.3 33.7 Bakery products 98.2 124.2 26.5 Starches, starch products and animal feed 93.7 117.8 25.7 Meat and meat products 101.3 125.7 24.1 Fruits and vegetable products 96.2 114.1 18.6 Oils and fats 92.8 109.2 17.7 Grain mill products 98.0 110.7 13.0 Other food products 99.6 110.6 11.0 Sugar 97.4 107.0 9.9 Table prepared by the Office of SAMPRO based on information published by Statistics SA. 47
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-15 290.0 Producer price indices of dairy products, food products and all South African products from February 2000 to February 2015 Index: 2000=100 270.0 250.0 230.0 210.0 190.0 170.0 150.0 130.0 110.0 90.0 All SA products FOOD Dairy Products Graph prepared by the Office of SAMPRO based on information published by Statistics SA 48
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
...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
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 1.2 13.1 Long Life Milk (UHT Milk) 4.1 23.4 Flavoured Milk -2.2 5.7 Yoghurt 2.5 7.8 Maas 5.3 13.1 Pre-packaged Cheese 29.0 8.2 Cream Cheese 0.4 10.9 Butter 1.4 25.8 Cream 5.9 18.9 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
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 4.2 4.7 4.4 2.5 1.2 UHT milk 10.1 6.4 2.1 2.5 4.1 Flavoured milk 7.5 2.4-0.4-2.1-2.2 Yoghurt 3.3 2.9 2.7 2.2 2.5 Maas 1.8 0.4 2.0 4.0 5.3 Pre-packaged cheese 11.7 19.5 23.1 27.2 29.0 Cream cheese 3.4 1.2 2.3 2.2 0.4 Butter 2.8 0.2-3.9 0.5 1.4 Cream 4.5 8.3 6.0 6.4 5.9 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
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 2012. 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 0.7 0.9 5.2 8.0 13.1 14.8 21.0 UHT milk 1.6 2.8 8.0 14.9 23.4 18.5 32.4 Flavoured milk -1.0-0.3 2.4 1.8 5.7 7.1 10.8 Yoghurt -3.4-2.7 0.5 2.9 7.8 6.1 13.2 Maas -0.4 1.0 6.1 8.7 13.1 12.4 17.0 Pre-packaged cheese -4.0 1.1 2.7 3.7 8.2 7.0 9.0 Cream cheese -0.8 3.7 4.4 7.8 10.9 13.0 18.2 Butter -1.5-0.3 10.4 8.5 25.8 14.6 19.2 Cream 4.8 4.8 9.8 15.3 18.6 20.4 29.9 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
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 29.0 1 Cream 5.9 2 Rice 5.8 3 Maas 5.3 4 Long Life Milk 4.1 5 Coffee 3.1 6 Yoghurt 2.5 7 Butter 1.4 8 Instant Cereal 1.4 9 Fresh Milk 1.2 10 Bread 1.0 11 Cream Cheese 0.4 12 Margarine -0.4 13 Tea -0.4 14 Flavoured Milk -2.2 15 Maize Meal -2.5 16 Short Life Juice -3.0 17 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
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