In many respects the dairy industry occupies a special position among the other sectors of agriculture. Milk is produced everyday and gives a regular income to the numerous small producers. Milk production is highly labour-intensive and provides a lot of employment.
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Diary industry
1. 1
In manyrespectsthe dairyindustryoccupiesaspecial positionamongthe othersectorsof agriculture.
Milkis producedeverydayandgivesaregularincome tothe numeroussmall producers.Milkproduction
ishighlylabour-intensive andprovidesalot of employment. Anditiskindof ‘white gold’whichcanbe
processedtoformmany milkproductslike cheese,butter&yogurtthatare majorlyusedinmanydishes
as itscomponents. These milkproductsaddtaste toa verysimple dishandhence consumedbypeople
all overthe world.
The whirlwindof changes,whichispassingthroughthe world,isalsoexercisingagrowinginfluenceon
the dairyindustry.The numberof milkproducersis increasingrapidly,the dairyprocessingindustryis
becomingmore andmore highlyconcentrated,the international dairymarketsare increasingly
liberalisedandare givinggreateropportunitiestolow costproducers,includingmanyfromdeveloping
countries.
The compositionof dairyproductconsumptionvariesacrossdifferent regionswithliquidmilkasthe
overall mostimportantproductbyvolume.However,processeddairyproductsbecome more important
withincreasingincomesandlivingstandards,andindevelopedcountriesthe trendgoesmore andmore
towardshighvalue functional foodsthatrequire considerable researchinvestmentsandsophisticated
processing.
2. 2
Two modelsof doing businessinDairy industry:
UnorganizedDairy Enterprises
Here,milkissolddirectlyfromthe milk parlours toconsumers,local confectionariesorrestaurants.
These are verysmall-scale businesseswhichcatertoonlylocal marketswithlimitednumberof dairy
products.
OrganizedDairy Enterprises
A. Private Dairies
Privatedairies are the enterpriseswho own the milk parlouron their own,and then they processtheir
milk into valueadded products.ParagMilkFoodsis India’slargestprivate dairyandmanufacturersof the
Gowardhanand Go range of milkandmilkproducts. Saputo Inc. isa Montreal-basedCanadiandairy
company.Saputo'sbusinessincludesdairyproducts,anditisthe tenthlargestdairyprocessorsinthe
world.MüllerWisemanDairies(formerlyRobertWisemanDairies) isone of the largest milksuppliers
and distributorsinGreatBritain.Itispart of the MüllerUK & IrelandGroup
B. DairyCo-operatives
A dairy cooperativeis a business,which is owned and controlled by the dairy farmerswho producethe
milk used by the cooperative. Thisstructure consistsof adairy cooperative societyatthe village level
affiliatedtoa milkunionatthe districtlevel whichinturnisfederatedintoamilkfederationatthe state
level.Milkcollectionisdone atthe village dairysociety,milkprocurementandprocessingatthe District
MilkUnion andmilkproductsmarketingatthe state milkfederation. Here all small-scale dairy
enterprisescome togethertoforma large co-operative,thisresultsinlargerreachof theirproductswith
large profits.
In the UnitedKingdom,all the milkproducedbyfarmersisprocuredbythe cooperatives.Privatedairies
arerequiredtobuytheirmilkrequirementfromcooperatives.New Zealandhasnoprivate sectordairy
plants.As manyas90% of dairiesinthe erstwhile WestGermanyand 100% inDenmark,Netherlandsand
Swedenareinthe cooperative sector. Inthe UnitedStates, 70% of the dairyindustryiscooperative. In
India,Dairyco-operativesaccountsfor60% share of processedliquidmilkmarket. Alsothere are about
170 milkProducerco-operative unions.
In India,GujaratCo-operative MilkMarketingFederationLtd.(GCMMF) famousfor‘Amul’productsisa
perfectexampleof co-operative dairy.DairyFarmersof America Inc. (DFA) is national milkco-operative
whichisownedandservedbynearly15,000dairy farmersrepresentingmore than9,000 dairy farms.
Arla Foods isan International cooperative basedin Århus,Denmark,andthe largestproducerof dairy
productsin Scandinavia.ArlaFoodsisthe seventhlargestdairycompanyinthe worldmeasuredby
turnover.Dairy Farmers isone of the largestandoldestdairymanufacturersin Australia.FonterraCo-
operative GroupLimited is a NewZealandmultinationaldairyco-operativeownedby10,600 New
Zealandfarmers.Itisfourthlargestcompanyworldwide onthe basisof itturnover.UnitedDairy
Farmers isa leadingUKdairyco-operative ownedbyfarmermembersinNorthernIreland,Englandand
Scotlandwitha turnoverinexcessof £400 millionperyearandemployingaround1,000 people.
3. 3
Major Milk ProducingCountries
India- World’slargest producer ofMilk
Indiaisthe world'slargestproducerand consumerof milk.In2013, total annual productionof milk in
Indiaisestimatedtobe 132.4 milliontonnes,enoughmilktofillover44,000 Olympicsizedswimming
pools!Recentyearshave seenasignificantgrowthinmilkproductioninIndiadue todevelopmentof
large co-operatives. With17%share of global milkproduction,Indiandairyindustryisundergoing
transformational change. AlsoIndiatodayisthe lowestcostproducerof perlitre of milkinthe world,at
27 cents,comparedwiththe U.S' 63 cents,andJapan’s$2.8 dollars. Indiaproduces46.57milliontonnes
of cow’smilk.Here milkproductionisgrowingat7% by volume andapproximately10% byvalue.In
2012, India was the largestproducer of goat and buffalo’smilk,producing4.85 millionmetrictonnes
and 66 millionmetrictonnesof milkrespectively.
Indiahardly exports Milk.But,scenariowill be change soonwiththe participationfromprivate sectorsis
estimatedtobe increasing,leadingtothe growthof more organizedformof businessinthe dairy
industry. Indianow isall setto become the world'slargestfoodfactory.Incelebration,IndianDairy
sectoris nowreadyto invite NRIsandForeigninvestorstofindthis countrya place forthe mammoth
investmentprojects.Be itinvestors,researchers,entrepreneurs,orthe merelycurious –IndianDairy
sectorhas somethingforeveryone. However,the efficiencyof the Indiandairyingsectorisabysmally
low.Evendairying ispredominantlyunorganisedandthe sectorisdependentonrural householdsfor
supplies.
Alsoto take advantage of thislowestcostof milkproductionandincreasingproductioninthe country
multinationalcompaniesare planningtoexpandtheiractivitieshere.Some of these milkproducershave
alreadyobtainedqualitystandardcertificatesfromthe authorities.Thiswill helptheminmarketingtheir
productsin foreigncountriesinprocessedform.Organizedmarketisgrowingat10% invalue terms
annuallywhichwill furtherboostthe dairyindustry.
GujaratCo-operativemilkMarketing Federation Limited (GCMMF) –AmulProducts,ParagMilkFoods,
Aarey Milk, MotherDairy are some of the keyplayersfromIndiandairyindustry.
The international dairytrade isdominatedby fourplayers- EU,NewZealand,Australia and USA - which
togetheraccountfor 85% of all exports.New ZealandandAustraliaexportasmuch as 80% and 50% of
theirmilkproductionrespectively.
4. 4
Europe Union
Milkis producedineverysingle EUMemberState withoutexception.Furthermore,milkisthe EU
numberone single productsectorintermsof value at approximately15% of agricultural output.The EU
isa majorplayerinthe worlddairymarketas the leading exporterof manydairyproducts,mostnotably
cheeses.
The EU's mainproducersare Germany,France,the UnitedKingdom, the Netherlands,ItalyandPoland
whichtogetheraccountformore than70% of the EU production.
NewZealand
Dairyfarmingis part of a longandproud agricultural traditioninNew ZealandTheprincipal
manufacturersof dairyproductsinNewZealandare membersof the DairyCompaniesAssociationof
NewZealand.NewZealanddairyproductsare promotedaroundthe worldwithdistinctive brandssuch
as Fernleaf,Anchor,Kapiti,Anlene,AnmumandFresh‘nFruity.However,the vastmajorityof New
Zealanddairyproductsare usedas ingredientsinconsumerproductssoldunderglobal brands. . New
Zealandnowproducesmore than100 categoriesof dairyproducts.
The dairy industryhadexportsalesof more than$6.3 billionin2007, makingit New Zealand’sleading
exportearner. NewZealandsells95%of itsdairy productsabroad,whichisa greaterproportionthan
any othercountry.
UnitedStates
In 2013, the UnitedStatestoppedthe rankingwithacow milkproductionquantityof about91.27
millionmetrictons. U.S.dairyfarmsproduce roughly23 billiongallonsof milkannually.The average
dairycow producesnearly7 gallonsof milkperday. There are dairy farmsinall 50 statesandPuerto
Rico.Dairy isthe numberone agricultural businessin California,Idaho,Arizona,Utah,New Hampshire,
Michigan,NewMexico,NewYork,Pennsylvania,Vermontand Wisconsin.Californiaisresponsible for
21.3% of the U.S.milksupply – more than anyotherstate. In 2012, US was the largest producer ofmilk
in the world producing 90 millionmetrictonnes ofmilk.
The U.S. dairy industryisestimatedat$140 billionineconomicoutput,$29 billioninhousehold
earnings,andmore than900,000 jobs(basedoneconomicanalysisof directandindirecteconomic
impactof U.S. dairyfromfarm throughprocessing).
Afimilk,a farmin Isreal, isone of the world’stopmilkproducers whogets40,000 litresof milkaday
from950 cowswitheach giving42 litres.Apartfromthese countries,China,PakistanandAustraliais
alsoamong the majorproducerof milkaroundthe global.IndiaandPakistan’scombinedannual
productionof buffalomilkaccountsforalmost80% of the buffalomilkproduction inthe world. Apartof
it, China wasthe largest producerof sheep’smilkin 2012, producing 1.58 million metric tonnesof milk.
Pakistan also produced 23 million metric tonnesof buffalo’smilkwhich is second highestin the world.
The EuropeanUnion- EU28, Indiaand the US are the largestmilkproducers andare expectedtoremain
so in2020. However,the share of IndiaandChinaare projectedtoincrease.New Zealand,EU-28,
Australiaandthe US are the largestexportersof Milk. New Zealandandthe US exportsare forecast to
increase considerably.Russia,ChinaandMexicoare the largestimporters. Argentinaisexpectedto
become a largerexporterof milkproducts.
5. 5
Thisdairyindustryisthe sector withthe highestdegree of protectiondue tothe economically
vulnerable positionof small milkproducers.Milk - alsoknownaswhite gold - can be usedtomake an
enormousvarietyof highqualityproducts.The highcostof milkasa raw material hasnecessitateda
high-techprocessingindustry.The special nature of milk(perishableandbulky) leadstothe necessityof
strict andcomprehensivequalityregulationandtohightransportcosts.The large dependence of milk
producersonthe dairyprocessingindustryhasresultedinastrongpositionheldbythe co-operativesin
milkmarketingandinthe processingindustry. Inall we cansay itis alreadymatured industryinthe
developedregions andare alsoboomingata fasterpace in Asiancountries.