Fonterra — the world’s largest exporter of dairy products is planning a public stock offering.
Fonterra was formed through the 2001 merger of the two largest co-operatives, New Zealand Dairy Group and Kiwi Co-operative Dairies, together with the New Zealand Dairy Board, giving it more might to compete on a global basis. Today, it has near-monopoly control of the New Zealand domestic and export dairy industries, sets the milk price for its loyal 11,000 farmer-shareholder base and has operations in 140 countries spanning Australia, Asia, the Middle East and Latin America.
Last year, 2011, was a record year in sales for Fonterra, enough to catapult it past the giant French and Dutch co-operatives, Lactalis and FrieslandCampina, and today it trails only its corporate competitors, Nestle S.A. and Danone S.A.
Posted: February 13, 2012 at 2:38 pm
By News Editor
A new report from Rabobank’s global Food & Agribusiness Research and Advisory department titled “Global Dairy Outlook: Show me the money,” Rabobank says that the global dairy market will offer strong growth prospects in the coming five years, but the uneven spread of this market expansion and an era of elevated pricing will create as many challenges as opportunities for key players along the dairy supply chain.
Growth will be highly skewed to emerging markets, with countries like China, India and South East Asiaexpected to account for more than 80% of market volume growth, while western markets continue to mature. “Tapping into emerging market growth will present a particular challenge for many of the world’s dairy processors, most of which are domiciled in, and still focused on, the EU and U.S. markets,” saidTim Hunt, Global Dairy Strategist for Rabobank.
Opportunities will also be uneven across product categories. Economic, demographic and dietary trends are likely to see cheese sales underperform the broader dairy market. With sales of higher end whey product set to track a much faster growth path, the strategic value of whey pools is rising rapidly. “The divergence of cheese growth and whey demand represents a major structural shift in the market, and justifies a re-evaluation of ingredient production and sourcing strategies,” said Mr. Hunt.
Rabobank forecasts that solid market growth, supply constraints and a structural shift in the costs of producing milk will sustain high milk and dairy commodity prices over the medium term. But this won’t translate to increased profits for all.
Posted: February 9, 2012 at 7:24 pm
By News Editor
The Lactalis American Group, a division of the French conglomerate Groupe Lactalis has announced plans to build a 61,300-square-foot plant that will produce fresh mozzarella in Nampa, Idaho. The plant will be operating by spring 2013.
“This is a great day for Lactalis, particularly for the Nampa team,” said Jean Paul Quiblier, vice president of manufacturing and purchasing for Lactalis American Group.
Fresh mozzarella is a relatively small sideline of the existing Nampa plant, with 40 workers producing around 7 million pounds of the cheese per year, officials said.
That output will increase to 40 million pounds per year of Galbani brand cheese when the new plant opens, taking on the existing 40 workers and hiring about 70 more, said Lenny Bass, who will manage the fresh mozzarella operation.
The existing plant will continue its focus on producing string cheese, plus bulk and shredded mozzarella, he said.
A $50 million whey-drying tower, completed in 2010, turns the liquid left over from cheese-making into a protein powder used in animal feed and protein drinks.
The existing plant goes through about 4.2 million pounds of milk a day, and about 80 percent comes from Treasure Valley dairies, other milk comes from the Magic Valley.
Posted: January 16, 2012 at 7:46 pm
By News Editor
Nestlé is helping China accelerate the development of its milk industry with the construction of a new dairy farming institute in Shuangcheng in Heilongjiang province.
The institute, with its series of training farms, aims to be the country’s leading dairy training centre, offering teaching courses from national and international experts. Dairy farm owners and workers from Shuangcheng and other Chinese regions will be able to improve their farm management skills and learn how to use the latest agricultural technology.
They will gain practical experience in expanding their farm businesses, improving productivity and sourcing high quality milk sustainably. Local partners will be encouraged to help create an investment fund of 2.5 billion RMB for the project.
Nestlé has agreed to work with the Shuangcheng government to increase levels of training and technical assistance already provided to local farmers. In partnership with the authorities, Nestlé has distributed 1,000 free milking machines to farmers to ensure no farmers in the region have to continue milking by hand.
Dairy farms in the eastern Bay of Plenty in New Zealand have been cut off from milk pickup due to flooding. The Bay of Plenty has been inundated with up to 300 millimetres of rain since Thursday.
Fonterra is using alternative routes and extra trucks to collect milk from the farms but says it was unable to collect milk from about 90 farms on Sunday and those without adequate storage had to dump their milk.
But Fonterra’s Edgecumbe operations manager Paul Rennie says they have now managed to get access to all their suppliers after roads reopened or detours were found. He says Fonterra is having to use some back roads to gain access so the milk collection is taking a bit longer, and it’s using two extra trucks to ensure coverage.
Mr Rennie says farming areas worst hit by flooding included Whakatane, Opotiki and Waimana. The president of Federated Farmers for Bay of Plenty says about 20 farms in the region are under water on Monday. John Scrimgeour says some farmers are worried about what land damage they will find once the water has receded.
“It’s certainly not the start to the new year that they were hoping for. They are used to dealing with floods on a regular basis, and while they’re disappointed by it, they will just get on and clean up and carry on.”
World Wide Sires, LTD. teamed up with Accelerated Genetics to host a World Dairy Expo International Reception and Dinner. Here’s John Schouten, World Wide Sires CEO (center) with some of the guests. The organization is owned by Accelerated Genetics and Select Sires.
World Wide Sires, Ltd. is the world’s leading cattle genetics marketing organization representing the majority of the U.S. Artificial Insemination Cooperatives. In an atmosphere of trust and cooperation, World Wide Sires brings together suppliers and customers to promote efficient global livestock production. Quality genetics, high integrity, personal contact and superior customer service are the cornerstones for ensuring continued market leadership.
I talked with John before the evening’s activities got underway. He says World Wide Sires is celebrating forty years and he’s been with the company for twenty five of them. He does a little bit of travel as the territory they serve has grown. “Traditionally, our key markets have been located in western Europe as the company got started but today we have new and exciting markets in places like China, India and Russia.” He’s proud to represent the best genetics in the world to their customers. He’s very optimistic about growth in trade even in countries where we currently have marketing challenges. I asked him the thing he’d like his customers to think of when they think of World Wide Sires. He says, “Service with a smile.”
One of the international visitors to World Dairy Expo was Dr. Gonzalo Maldonado, Tri-State S.A.S, Colombia. I met him at the Accelerated Genetics and World Wide Sires International Reception and Dinner. Dr. Maldonado has been working with them for 43 years!
Dr. Maldonado says that when he got started the idea of artificial insemination was a tough sell. He basically had to conduct training sessions and educate dairy farmers about the benefits of improved genetics. Since then he says production has increased. He’s optimistic for the outlook for even more improved production in Colombia. Training and specialized advice is still very needed though.
Robotics is a word I’ve been hearing a lot around the media room at this year’s Expo. That’s probably because of several announcements like this one from DeLaval. At this year’s show they’re debuting the AMR automatic milking rotary system. I interviewed Thierry Perrotin, Marketing Implementation Manager, who is based in Sweden. You can see the unit in action in the video interview below.
The DeLaval AMR™ is the world’s first automatic milking rotary system. Winner of the EuroTier 2010 Gold Medal for innovation, the DeLaval AMR has been tested on farms in Sweden and Australia. The DeLaval AMR is the most advanced milking technology available – providing an automatic milking solution flexible enough to operate in different farming practices, from free stalls and loose housing to pasture-based dairying.
“The AMR meets the changing needs of our customers in North America,” said Christian Poggensee, Regional President North America. “As herd sizes continue to grow, the AMR is set to revolutionize high capacity automatic milking while offering dairy farmers better profitability, farm management and flexibility.”
The main components of the DeLaval AMR are teat preparation, attachment and teat-spray modules, two touch screens to operate the system, automatic cup back flush, automatic floor cleaning and safety systems. The first AMR systems will have up to 90 cow/hour capacity, depending on the number of robots installed. As many as five robots can be attached to the rotary.
Additionally, the DeLaval exhibit at World Dairy Expo will feature the United States’ public debut of Herd Navigator™, an advanced analysis system focused on proactive herd management.
Posted: October 3, 2011 at 8:04 pm
By Cindy Zimmerman
After more than four years in limbo, trade agreements with South Korea, Colombia and Panama have finally been sent to Congress by the White House and could be voted on by next week.
“The series of trade agreements I am submitting to Congress today will make it easier for American companies to sell their products in South Korea, Colombia, and Panama and provide a major boost to our exports,” President Obama said in a statement.
Agriculture Secretary Tom Vilsack said completing the agreements “will level the playing field and secure markets for America’s farmers, ranchers, growers and producers ahead of competitors in the global marketplace.”
Once the agreements were finally sent to Congress, the dairy industry began urging for immediate passage. Both the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) note that the FTAs have the potential to expand U.S. exports and create thousands of export-supporting jobs in the U.S. dairy industry, in particular.
Jerry Kozak, president and CEO of NMPF, says the South Korean agreement is especially significant. “hese agreements will not only expand export sales for such products as cheese, whey, skim milk powder, and other dairy products, they will also prevent our competitors from taking market shares that we currently have in those countries,” said Kozak.
Tom Suber, president of USDEC, agreed, pointing out that the industry estimates that as many as 10,000 additional U.S. jobs, both on and off the farm could be created by the Korea agreement alone. “The growth in exports of dairy products from these agreements will not only help bolster milk prices for America’s dairy farms, it will also expand jobs in the dairy processing and transportation sectors,” he said. “The FTAs represent a big win-win for all elements of the U.S. dairy industry.”
The dairy organizations noted that the export benefit from the Korea FTA to the U.S. dairy industry in the first few years after implementation will be approximately $380 million per year, on average, and the gains from the Colombia and Panama FTAs will add another $50 million annually.
While attending the 2011 IFAJ Congress in Canada I recorded a presentation by Richard Doyle, Executive Director, Dairy Farmers of Canada and President, International Dairy Federation. He’s pictured in the center of the photo. The panel was labeled, “Canadian Agriculture 101.”
A big part of Richard’s presentation deals with the supply management system in Canada that is “based on planned domestic production, administered pricing and dairy product import controls.” There are licensed quotas and various other components to the system which you can read about in this pdf. A good source of information is the Canadian Dairy Information Centre. They national system was introduced in 1970. Listen to his presentation here: Richard Doyle Presentation
Last week I joined with other members of the International Federation of Agricultural Journalists (IFAJ) for the 2011 IFAJ Congress. We meet every year in a different country to learn about agriculture there and for professional improvement sessions. This year we were in Canada and visited some dairy farms. My tour group visited Claynook Farms where we met owners, Wayne and Dennis Wagler.
The conversation with the dairy operators covered just about every topic you could imagine from genetics to marketing. I recorded part of a conversation with reporters in which I asked about their thoughts on the Canadian supply management system (more on that later). You can listen in on that Q&A here: Claynook Farms
I also recorded a video clip with part of the discussion too.
Leprino Foods Co. has opened a new facility in Singapore, which includes an “innovation studio” designed to create cheese and other dairy products for the Asia-Pacific market.
Leprino spokesman Ted Wie techa said the company’s international sales have more than doubled during the past two years, with the Asia-Pacific market playing a “significant role” in the expansion. The sales are driven by increased cheese consumption and demand for whey and lactose, used in confections and protein drinks, he said.
Leprino’s chefs at the innovation studio will work with customers — including U.S. and European restaurants in the Asia-Pacific market — to create products that appeal to the “tastes and choices” of the region.
Kevin Burke, Leprino’s senior vice president for global business development, said the firm will be in the region “long term.”
“We’re deeply committed to helping our customers in the region win in the marketplace,” Burke said. “Our investment in Asia will continue and increase over time.”
In addition to the Singapore expansion, the company is growing closer to home as well.
Leprino will open the first phase of its 500,000-square-foot plant near Greeley in November, Wie techa said.
The first phase of the Greeley plant will process 1 million pounds of milk a day, which will be converted to nonfat dry milk and sent to other plants. When finished, it will produce 700,000 pounds of cheese daily and employ 500.
The IDF World Dairy Summit 2011 will be highlighting the importance of dairy nutrition through three different sessions.
New to the programme this year, a conference exploring “Sustainable Public Health and Dairy Nutrition Economics” on October 19 is set to prove extremely valuable. With the important contribution of dairy products to human nutrition and health, the concept of Nutrition Economics helps to demonstrate how a greater awareness of the nutritional benefits of dairy products can improve nutritional status and reduce health care costs.
The interplay between economic systems and the nutritional value of food is particularly relevant today as we look ahead to increased longevity and aiming to improve public health across the globe. Coordinated by conference manager Irene Lenoir-Wijnkoop, an expert in nutrition economics at Danone Research as well as a member of the IDF Standing Committee on Nutrition and Health, a series of prestigious speakers will present recent findings and initiatives within this emerging science.
In addition, the conference “Dairy Products: A Healthy Choice” will focus on leading science projects in the health and nutrition area. On 16-17 October participants are invited to attend this three part conference, with presentations on the positive nutritional impact of dairy products, healthy aspects of specific nutrients in dairy, and how to address age-related nutritional needs with dairy.
Finally, on October 18, the Marketing Conference will showcase new thinking in dairy marketing following the theme: “Conveying the Benefits of Dairy to Consumers”. Presentations will concentrate on new strategic communication techniques such as social media, suggesting innovative ways to deliver positive dairy nutrition messages. Through exploring approaches followed in current and future campaigns this conference aims to develop a united approach and to make the dairy sector be once again top of mind for consumers.
The new 2011 Baileys® Irish Champion Holstein Friesian cow has been crowned. Dalevalley OT1 J Lulu, owned by Irish farmers Eugene and Sean Murphy, has won the prestigious award.
Dalevalley OT1 J Lulu, is a six year old cow that beat 24 other bovine beauties from across Ireland to take the Baileys Irish Champion title. The competition recognises good body conformation with proven excellence in milk production and it is the first time that the Murphy family, who are from Co. Cork, has won this prestigious competition which dates back to 1983.
Dalevalley OT1 J Lulu has had four calves and produced 12,007 kgs of milk in her last lactation (approximately 2,500 gallons.) She was bred in the North of Ireland, in Donegal, as part of the Dale Valley herd, owned by Roy Cromie and was purchased by the Murphy’s as a heifer-in-milk. She is the daughter of sire, Astronomical and dam Dalevalley Cousteau Lulu. She adds the title of Baileys Irish Champion to her recent success at the Cork Show.
Commenting on his selection, competition judge, Iwan Morgan from Wales said: “It has been an ambition of mine to follow in my father’s footsteps and judge this competition. All of the cows here today were remarkable but the sheer power and capacity of the winner and in particular that incredible udder gave her the edge.”
Fonterra, New-Zealand’s exporter of dairy products and ingredients, has recently opened a new Research & Development Centre in Amsterdam.
By opening this fourth R&D Centre in the world Fonterra concludes the migration of her European headquarters to Amsterdam.At the centre Fonterra is able to perform tests of new manufacturing processes and work together with partners on tailor made innovations. The centre will employ 10 technical specialists.
With the start of the new Research & Development Centre – and earlier the new European headquarters – in Amsterdam, Fonterra moves closer to her customers and partners in Europe. According to Koert Liekelema, General Manager of Fonterra Europe, Holland is the centre of dairy and food developments.
“At our new R&D Centre we can develop innovations more easily and market them quicker. The European consumer has very specific dairy wishes and we can fulfil those wishes and needs even better and quicker out of Amsterdam.”
Europeans consume more dairy products such as milk, yogurt and cheese than consumers in other markets, and globally there is greater awareness and attention on healthy and sustainable nutrition.
Calling all registered Holstein breeders in Ireland – your best show cow could be the next Baileys® Irish Champion Dairy Cow! Be sure to enter the competition for a chance to win this coveted title.
Pedigree Holstein Friesian breeders across the island of Ireland are being invited to compete for the top title of ‘Baileys Champion Cow’ which attracts a prize of €2,000 along with the Virginia Milk Products trophy. €650 will be awarded to the breeder of the ‘Reserve Champion’. In an enhanced Best Heifer in Milk prize fund of €1,700, 1st place attracts a prize of €500, 2nd place will be awarded €300, and €200 will go to 3rd place. In addition, €100 will be awarded to entrants from 4th to 10th place inclusively. Trophies will also be presented for Highest Protein Content, Best EBI and Best Exhibitor-Bred Cow. The Virginia Show, in Co. Cavan which celebrates its 70th Anniversary this year will once again play host to this prestigious event on Saturday 30 July.
To enter cows must first have produced 500kgs of butterfat and protein in a 305 day lactation (except for the heifer in milk awards). A 10% extra weighting is being given to the protein portion of the entry standard. Entrants are required to complete an entry form which this year should include a recent full body picture of their cow in electronic format. For further enquiries and to obtain an entry form contact Brendan Smyth, Competition Director on ++ 353 (0)87 2560952 or firstname.lastname@example.org
Baileys has been sponsoring the competition in association with its cream supplier, Glanbia Ingredients since 1983. Approximately 250 million litres of milk per year are needed to make Baileys which equates to the annual output of about 40,000 dairy cows.
Last week I attended the Alltech International Symposium. Of course dairy is a big part of the educational topics offered at this annual event. I’ve got a couple of interviews to share with you starting with this one.
Disruptive change sounds disturbing. However, perhaps it’s more of a challenge. Mandi McLeod, System Insights, Ltd., New Zealand, talked about it and its impact on the dairy industry during the Alltech International Symposium. She’s seen here being interviewed by Ireland’s RTE voice Damien O’Reilly. I spoke with Mandi after Damien to learn what is going on with dairy farming in her country and how she coaches family business strategy.
Mandi says the New Zealand dairy model is still working but needs to evolve further in light of disruptive changes in the industry. She says that their level of productivity hasn’t kept up with the price of their product which makes them vulnerable at the moment. The current pricing of dairy products is just not financially sustainable and it looks like that isn’t going to improve soon. Mandi is a family business strategist and advises dairy farmers to take a look at their business and make sure they’re using resources wisely. Sounds like common sense advice for any business. She wants people to enjoy what they are doing by finding a balance in their life and business. Having a good plan would help a family business tremendously. Perhaps you should give Mandi a call if you need help. Mandi McLeod Interview
A great article by Tom Quaife, Editor of Dairy Herd Network:
The fallout continues following the rejection of a stricter somatic cell count limit in the U.S.
Matt McKnight, vice president of market access and regulatory and industry affairs for the U.S. Dairy Export Council, told those attending the Pfizer Animal Health Dairy Wellness Summit on Friday that having a 750,000 cells/ml legal limit makes it more difficult to convince international trading partners that we are serious about milk quality.
“When you are sitting down with a trading partner, what’s in your books is what you have to live with,” he said. The trading partner can point out that the regulations allow the U.S. to produce milk up to the 750,000 limit, “so the burden is greater to prove we are below it,” he added.
On May 4, the National Conference on Interstate Milk Shipments rejected a proposal to upgrade the somatic cell count standard from 750,000 to 400,000 cells/ml.
Some countries, such as Russia, may not accept imported dairy products from milk above 400,000 cells/ml.
The U.S. has increased dairy exports in recent years, but many in the international trading arena are watching to see if the American dairy industry is serious about sustaining that progress. In 2010, the U.S. exported 12.8 percent of its milk production, on a milk-solids basis.
McKnight shared the results of a Global Buyer Survey, which was conducted last fall and polled 75 buyers from more than 25 countries.
The survey found that some buyers are skeptical. There’s frustration on their part “that we don’t move fast enough and skepticism on their part that we don’t want to continue,” McKnight said. For instance, buyers point to the somatic cell count standard and the fact the U.S. won’t change it. And, there have been instances where their product specifications for milk powder and other products have not been met.
Many buyers have exact specifications and don’t want variation. Yet, “our milk powder can range from 34 to 39 percent protein,” McKnight said.
The survey also identified opportunities. For one thing, the U.S. is seen as an alternative supplier to the Oceania countries of New Zealand and Australia. Some buyers see the Oceania countries as having a monopoly aspect when it comes to dairy exports.
“We’ve been a late-comer (to the dairy export market),” McKnight said. Yet, the U.S. has entered at a time when countries around the world are “starting to get more money in their pockets and moving up the food chain to eat,” he added.
In China, 20 million babies will be born this year and those babies will be pampered by their parents and grandparents, due to China’s one-child policy. That presents tremendous possibilities for the infant formula market.
To the credit of American dairy products, they are viewed as very safe, McKnight said. “No one around the world is concerned about the safety of the U.S. supply,” he said.
Posted: February 18, 2011 at 11:39 am
By News Editor
Canadian cheese maker Saputo Inc. will acquire the parent company of DCI Cheese Co Inc, one of the largest U.S. specialty cheese marketers, for $270.5 million to expand its presence in the lucrative market.
DCI’s product portfolio includes more than 100 types of specialty cheeses. It sells products under brand names such as County Line, Great Midwest, Joan of Arc and King’s Choice.
DCI, which employs about 475 people, recorded sales of $460 million in 2010.
The deal is expected to close in March.
Fairmount Cheese Holdings Inc is DCI’s parent.
Reporting by S. John Tilak, editing by Gerald E. McCormick
Posted: February 11, 2011 at 2:22 pm
By News Editor
Global dairy company Fonterra is now closer to the heart of Europe’s dairy and food innovation hub with the official opening of its new Amsterdam office in The Netherlands today.
The Amsterdam office, opened by Dutch Minister of Economic Affairs, Agriculture and Innovations, Mr Verhagen, will bring Fonterra closer to its partners and food manufacturing customers and open the door for new ideas and products.
Fonterra’s Managing Director of Global Ingredients and Foodservices Andrei Mikhalevsky says the move to Amsterdam exemplifies Fonterra’s commitment to growing its European business alongside its investment in dairy research and innovation.
“Our new office in Amsterdam provides a home to our international sales force as well as a local technical centre to support the growth of our value-added and specialty ingredients portfolio in Europe.”
“Fonterra already has a strong relationship with the Netherlands to build upon. As well as our existing partnerships and trading presence, we have also chosen to use Dutch ports and distribution channels for the majority of our exports to Europe.”
Minister Verhagen said: “The arrival of the European headquarters of Fonterra is an asset for the Dutch agri-food sector. Their coming is also a recognition of our strong business climate. We in the Netherlands, also have much to offer in terms of our own expertise and knowledge in the field of dairy and logistics.”
A host of European and New Zealand dignitaries attended the opening including the Deputy Mayor of Amsterdam, Lodewijk Asscher and New Zealand’s ambassador to The Netherlands, George Troup. Guests were greeted with a Maori Pōwhiri (traditional Maori welcome), enjoyed an array of New Zealand influenced food and had the chance to participate in a cheese tasting with technical experts.