yves boutonnat for safe food - 02 14 2008 presentation to safe food nsw february 14, 2008

Yves Boutonnat for SAFE FOOD - 02 14 2008

Presentation to Safe Food NSWFebruary 14, 2008


There are approximately There are approximately 98 000 dairy farms98 000 dairy farms employing employing 200 000 people200 000 people, ,

looking after looking after 4,4 million milking cows4,4 million milking cows

and producing and producing 24 billion litres24 billion litres of milk of milk per year per year

+ + 6 000 6 000 goat farmsgoat farms

+ 4 200 + 4 200 ewe farmsewe farms


The 98 000 dairy farms deliver annually 23 billion litres of milk to …

… 700 processing plants, employing 64 000 people

and generating 23,5 billions €.


The productions of the French dairy sector - 2006 -

3,7 milliards de litres of liquid milk 11%

2,2 millions de tonnes of yogurt and desert 7%

1,7 million de tonnes of cheese 38%

338 000 tonnes of cream 6%

400 000 tonnes of butter 19%

533 000 tonnes of powder milk 13%

36 000 tonnes of caséines 2%

590 000 tonnes lactoserum powder 3%

Share of collect (usable dry

material collected)

Mass

consumption products

72 % of collected milk

Industrial products

28 % of collected milk of

Source : ATLA


Laguiole Bleu d’Auvergne

Beaufort

Bleu du Vercors

Cantal

Fourme d’Ambert

Fourme de Montbrison

Tome des Bauges

Reblochon

Abondance

Bleu de Gex

Salers

BeurreCharente-Poitou Comté

Morbier

Mont d’Or

Munster

LangresChaource

Epoisses

MaroillesNeufchâtel

Livarot

Camembert de Normandie

Beurre & Crème d’Isigny

Brie de MeauxPont l’Evêque

Bleu des Causses

Saint Nectaire

Brie de Melun

A.O.P. Cow’s Milk

Cow : 28 A.O.P.

Butter : 2 A.O.P.

Cream : 1 A.O.P.


0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

millions d'euros

Exports in valueImports in valueBalance in value

French international trade of dairy products (to EU and other countries)

The international trade of dairy products

The foreign outlet : To day :

a « dairy product » positive balance of 2 billions per year

To morrow : decrease of restitutions increase of the imports ?

Source : ATLA


Export markets Export markets essentielly europeansessentielly europeans but 20% of exports go to other foreign countriesbut 20% of exports go to other foreign countries

Value of french exports of dairy products(Millions d’€)

BelgiqueBelgique550550

AllemagneAllemagne672672

Pays BasPays Bas211211

ItalieItalie422422

Roy. UniRoy. Uni424424

EspagneEspagne513513 MaghrebMaghreb

112112

Reste Reste AfriqueAfrique

8080

Am. du NordAm. du Nord152152

PECO et CEIPECO et CEI3434

Proche et Moyen Proche et Moyen OrientOrient

9696

Reste AsieReste Asie146146

OcéanieOcéanie66

Total Exports : 4 007 millions d’€ of which EU 25 : 3 181 millions d’€ other foreign countries : 826 millions d’€


The french are heavy consumers of dairy productsThe french are heavy consumers of dairy products(annual consumption, kg/habitant)(annual consumption, kg/habitant)

RangKg

d'équivalents lait

FromageLait

liquide

1 Finlande 496 France 24,1 Finlande 160,02 Suède 450 Italie 20,5 Irlande 156,73 France 406 Allemagne 19,7 Suède 131,14 Allemagne 384 Danemark 17,3 Danemark 121,25 Autriche 371 Pays Bas 16,7 Roy. Uni 119,56 Danemark 344 Suède 16,6 Portugal 94,77 UEBL 328 Autriche 16,1 Pays Bas 88,28 Pays Bas 320 UEBL 15,8 Autriche 83,59 Italie 300 Portugal 10,2 France 73,3

10 Irlande 285 Roy. Uni 8,1 Allemagne 63,411 Roy. Uni 280 Irlande 5,8 Italie 62,712 Grèce 20713 Portugal 19914 Espagne 189

Cheese Liquid milk


The dairy products outputs (excluding milk powder)

Breakdown of volume consumption - Summary year 2005

Products

Consumption Household/sales

Food service Industry

Fluid milk 86% 14% 0%Cream 62% 16% 22%Butter 45% 10% 45%Cheeses (1) 79% 9% 12%Yogurt & Desert (2) 89% 11% 0%

TOTAL 81% 12% 7%

(1) Inc fresh salted cheese (2) Ex. fresh salted cheese

Source : CNIEL


Breakdown of households food spendings2006

The dairy sector gathers up almost one fifth of all food spendings

•Fruits & vegetables

•10% (+1,9%)

•Sea food

•4% (-2,7%)

•Meat & poultry

•14% (-0,5%)

•Delicatessen

•12% (+3,5%) •Drinks •9% (+1,0%)

•Dairy •18% (-0,5%)

•Frozen food•6% (+3,7%)

•Grocery •27% (+0,4%)

•Evol total : +0,7%


What dairy products for tomorrow?

• Decline of products used as ingredients (standard milk, butter) for home usages that are becoming obsolete (pastry, home made sauces, and elaborate cooking).

• Increase of culinary aids: plain or flavoured creams, cooking cheese (spreadable, gratin, etc..), ready to use sauces.

• Multiplication of recipies and new targeted offers to dismantle the monolith image of some markets (« milk is just milk »).

• Increase of personalised single shares, a work largely done by yogurts and dairy deserts, partially by cheese and still to be invented for butter and milk

• Setting up of meal solutions based on dairy products for out of home consumption. Development of cheese based meal solutions for home consumption.

• Ageing of the population : development of a dairy offer adapted to the needs of senior consumers (nutrition, packaging, advises).


U&A - Base = 1013 people

A food family with a very positive image

in %

65

62

60

45

39

37

22

23

19

26

26

29

6

7

9

14

13

15

4

4

6

10

12

10

3

4

6

5

10

9

Yaourts

Fromage

Lait

Beurre

Desserts lactés

Crème fraîche ou UHT longueconservation

8-10 6-7 5 3-4 0-2

7,8/10

7,6/10

7,4/10

6,8/10

6,3/10

6,3/10

Average note

Q9b.J e vais vous présenter différents produits laitiers. Pour chaque produit, je vous demanderai de me donner une note de 0 à 10. 0 signifie que vous avez une très mauvaise opinion de ce produit, 10 signifie que vous en avez une très bonne opinion, les notes intermédiaires servent à nuancer votre jugement.

Source : CSA

yogurts

butter

dairy deserts

cream fresh or UHT

cheese

milk


1

1

5

11

50

55

74

7

55

49

54

3

13

4

100 80 60 40 20 0 20 40 60 80 100

Milk

Yogurts

Cheese

Butter

Dairy deserts

Fresh cream

nsp

+ 70

+ 52

+ 37

- 43

- 44

- 54

Less healthy Most healthy

(55)

(2)

(/)

(19)

(22)

(/)

(2)

(1)

(4)

(35)

(28)

(22)

(00) : the most healty (first quote); (00) : the less healthy (first quote)

Q9b. Et toujours parmi ces produits, pouvez vous me donner ceux que vous estimez être les 2 meilleurs pour la santé ? et les 2 moins bons pour la santé ?

En %

U&A - Base = 1013 people

But there is a clear gap between two families

of dairy products

Source : CSA


N°1 in popularity

About the following types of farming, can you tell me if you have an excellent, good, bad or very bad opinion?

Dairy farming comes ahead of all types of farmingDairy farming comes ahead of all types of farming

Dairy farming enjoys an excellent opinionDairy farming enjoys an excellent opinionpositive forpositive for (90%)(90%)

. . Wine growingWine growing (83%)(83%)

.. Fruits and vegetablesFruits and vegetables (82%)(82%)

.. Bovine meat Bovine meat (77%)(77%)

.. Cereals Cereals (71%)(71%)

.. And a less positive opinion And a less positive opinion for porks and poultryfor porks and poultry (50%)(50%)


Increased trust over the last 5 years

45

24

46

51

8

23

1

2

2006

2001

améliorée inchangée dégradée nsp

Your trust in dairy farmers

Would you say that over the past 10 years, the situation has improvedgotten worse, or remained inchanged?

Basis total 2006 : 1001

Basis total 2001 : 927

en %

improved unchanged got worse


Dairy farming : controlled modernity

Requires a real know-how Requires a real know-how (96%)(96%)

Is more and more a professional managerIs more and more a professional manager (87%)(87%)

Is a dynamique and entrepreneurial person Is a dynamique and entrepreneurial person (91%)(91%)

Portrait of a real professional …

And would you agree totally, rather yes, rather not or not at all to say that the trade of dairy farming is a trade that… ?

He knows how to combine productivity and quality He knows how to combine productivity and quality (85%)(85%)

He is eager to improve and modernise He is eager to improve and modernise (87%)(87%)

For each sentence, tell me if you agree totally, rather yes, rather no or not at all…

… … master of his lifemaster of his life


Are farmers who work a lot for a small revenue Are farmers who work a lot for a small revenue (84% )(84% )

Who deserve to get help to maintain farming and life in the country Who deserve to get help to maintain farming and life in the country (87% )(87% )

A difficult trade and situation…

And would you agree totally, rather yes, rather not or not at all to say that the trade of dairy farming is a trade… ?

And would you agree totally, rather yes, rather not or not at all to say that dairy farmers… ?

A trade with an uncertain future…A trade with an uncertain future…

only 1 french person out of 2, think it has a future only 1 french person out of 2, think it has a future (51%)(51%)


…but they are essential actors of the economy

And would you agree totally, rather yes, rather not or not at all to say that the trade of dairy farming is a trade… ?

An indispensable trade An indispensable trade (76%)(76%)

Important actors of the economyImportant actors of the economy (88%)(88%)


An essential role to play …

… … at environmental and social levels…at environmental and social levels…

To maintain rural life To maintain rural life (90%)(90%)

For quality of life in France For quality of life in France (80%)(80%)

To keep up the landscape To keep up the landscape (76%)(76%)

And do you agree totally, rather yes, rather not or not at all with the following assesments? Dairy farmers play an essential role…

20


Dairy markets : where do we stand ? Where are we going ?

The changes in agricultural policies

What prospects for the producers ?

Outlook on the Dairy sector

21


A world gone crazy…

World rates in $

Butter skim milk powder fat powder

22


Why this situation ?The present situation results

from the conjunction of 3 factors :

-The increase in world demand

- The drying out of the world market

-The drop in the collection in Europe

23


Will this last over the long/medium term ?

The prospects of dairy consumption are related to :

-The increase of the world’s wealth

-The increase in population

24


Annual growth of GDP (PIB) (%)1997-2006 2007-2016

WORLD 3.98 4.50 DEVELOPED (pays développés) 3.78 3.08 NORTH AMERICA 3.03 2.54 WESTERN EUROPE 2.47 2.12

OCEANIA DEVELOPED 3.40 2.66 OTHER DEVELOPED 2.89 2.66 TRANSITION 5.95 4.23 DEVELOPING (pays en développement) 4.04 4.95 AFRICA 4.54 4.89 LATIN AMER & CARIB 1.98 3.70 ASIA & PACIFIC 4.92 5.65 LDC 5.16 5.14 OTHER DEVELOPING 3.75 4.88

Source FAO 2007

25


GROWTH OF POPULATION IN URBAN AREAS

Source FAO 2007

0,00,51,01,52,02,53,03,54,04,5

1950

1960

1970

1980

1990

2000

2010

Bil

lio

n

DevelopingUrbanPopulation

DevelopedUrbanPopulation

26


This brings prospects of consumption growth for all products …

Source FAO 2007

0

5

10

15

20

25

2006 2016 2006 2016 2006 2016 2006 2016

mil

lio

n t

on

ne

s

Developing

Developed

Beurre Fromage LEP P. grasse


PECO + CEI102%

223 kg/hab.South East Asia

71%18 kg/hab.Maghreb + PMO

81%83 kg/hab.

ALENA99%

231 kg/hab.

Central America + Caribbean71%

71 kg/hab.

South America98%

138 kg/hab.

Other Africa89%

25 kg/hab.

Southern Asia99%

81 kg/hab.

Oceania236%

331 kg/hab

Occidental Europe 109%

286 kg/hab.

1 zone in slight surplus4 zones in deficit

4 zones balanced or almost 1 zone strongly export oriented

…with contrasting potential of evolution in the big blocks

Self sufficiency in dairy products and level of apparent consumption per cqpita

28


Today, the question is not whether the markets are

expanding or not

It is whether the milk producers in the world will be able to meet

the demand

On the markets level

29


Very few regions can produce milk

30


Few are growing

31


The key question is whether the emerging countries will be able to

develop their dairy production

It may be YES for Brazil and India

It is NO for Russia, Ukraine and Argentina

What about China ?

32


Whatever happens, a large part of the world supply will be expected

from the traditional dairy producing blocks : Europe, the USA and

Oceania

But in these countries, two new phenomenoms will interfere :

the biofuels and the climatic change

33


Development of Ethanol production in USA

0

10

20

30

40

50

1996 2001 2006 2011 2016

bill

ion

litr

es o

f et

han

ol

0

20

40

60

80

100

120

mill

ion

t (

mai

ze)

Ethanol production Maize useRen. Fuel Standard

Source FAO 2007

34


Development of Biofuels in Europe

0

5

10

15

20

25

30

35

2002 2004 2006 2008 2010 2012 2014 2016

bill

ion

litr

es o

f b

iofu

els

0

5

10

15

20

25

mill

ion

t (

cro

ps)

Ethanol Biodiesel Wheat useMaize use Oilseeds use

Source FAO 2007

35


Climatic change is real in Australia

Source ADF 2007

36


Results of a survey over australian farmers : what will be the biggest challenge in the coming

years ?

Source ADF 2007

0% 10% 20% 30% 40% 50% 60%

price of milk

profits

cost of feed

cost of other inputs

water

labour

climate

% of farms

2004

2005

2007

37


Consequently, everyone anticipates an increase in the price of dairy products

in the coming years

With however a strong volatility due to the disappearance of agricultural

policies

38


39


It is necessarily bad

May be it will fail…

L’OMC / TWO

40


We are heading towards a total desabling of the PAC as the treaty of

Rome set it

There is no more regulation by the public authority

The challenge is therefore to get organised at interprofessional level to

palliate public pulling out

Health check In summary

41


Dairy markets : where do we stand ? Where are we going ?

The changes in agricultural policies

What prospects for the farmers ?

42


Develop and keep the value in our branch

Defend the french dairy model

Prepare the future in terms of economic organisation

The three fundamentals

43


Keep the value in our branch

« Mr President, this is not about your popularity, but the price increase of a camembert »

44


Keep the value in our branch

Dairy products. Our friends for life

WE WILL NOT BE MADE A FOOL OF !

45


Milk is a social model in itself

It must be defended in political circles

It’s the « European parliamentary day » 2008 event

Defend our model

46


-Investment fund- Milk Institute

- Contractualisation

Prepare the future in terms of economic

organisation

47


We are experiencing a radical change

The interprofession will have a very big part to play

The role of farmers tomorrowis at stake to day

Conclusions

48


Thank you for your attention

yves boutonnat for safe food - 02 14 2008 presentation to safe food nsw february 14, 2008

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