A Global Outlook on Sustainability in the Dairy · PDF fileA Global Outlook on Sustainability...
Transcript of A Global Outlook on Sustainability in the Dairy · PDF fileA Global Outlook on Sustainability...
A Global Outlook on Sustainability in the
Dairy Production
VII CONGRESO COOPERATIVAS AGRO-ALIMENTARIAS
Valencia, 27 February 2015
Hans Jöhr
Head Corporate Operations Agriculture
Content Part I:
•The challenge to feed the world
•Urbanization and changes in consumption pattern
•The battle for resources and the make up of waste
•The role of livestock in feeding future generations
Part II:
•Sustainable Agricultural Initiative at Nestlé
•Driving for sustainable dairy at Nestlé (various examples)
•Developing the next generation of dairy farmers
•Summary
Nestlé Corporate Agriculture 5 March 2015 2
Feeding 9+ bio people by 2050 – threats or opportunities?
Policy interventions
Water Management Technical Assistance
Nestlé Corporate Agriculture
Soil fertility Energy pricing Breeding
5 March 2015 3
Changes in consumption pattern
5 March 2015 4
Projected increase 2006 - 2030 / 2050
• Developing countries 27 / 46 (%)
• Developed countries 6 / 10 (%)
• World 11 / 19 (%)
Milk and Dairy Consumption Trends
Developing vs Developed World
(kg
/pe
rso
n/y
r)
Regions
(kg
/pe
rso
n/y
r)
Nestlé Corporate Agriculture
Projected increase 2006 – 2030 / 2050
• East Asia 48 / 68 (%)
• South Asia 32 / 63 (%)
• Latin America/ Caribbean 15 / 25 (%)
Source: FAO, 2012. World Agriculture Towards 2030/2050, Rome
Changes in consumption pattern due to urbanization – the case of China
0
5
10
15
20
25
Pork Beef Poultry Eggs Milk
Urban vs. Rural per capita consumption (kg)Source: China Statistic Yearbook
Rural Urban
3.5
15.418.3
22.626.0
29.2 31.3
05
101520253035
Rural Low income
lower middle income
middle income
upper middle income
high income
highest income
Urban
Per capita milk consumption China (kg)Source: China Statistic Yearbook
• Large urbanization process (urban>rural
pop.)
• Additional 300 - 400 mio people will
move to urban areas in the next years
• Change in consumption pattern due to
fast economic development and
urbanization
• Milk consumption in urban
areas increases with the level
of income
• Avg. milk consumption:
• Urban 15.5 (kg/yr)
• Rural 3.5 (kg/yr)
Nestlé Corporate Agriculture 5 March 2015 5
A strong demand for milk in China
Can China produce
642’000 new dairy cows
per year?
Can the world market
deliver up to 642’000 new
dairy cows per year to
only serve China?
3.85 Mio tons = 12’350 cows/week
13 20
37
64
year
27
27 Mio tons of milk over 7 years
27 Mio tons = 7 year
3.85 Mio tons = 1 year
3.85 Mio tons = 642’000 cows/year
(6 tons milk/cow)
55.8 Mio MT corn
1 Mio MT hay
80 Mio MT corn
6 Mio MT hay
Nestlé Corporate Agriculture 5 March 2015 6
2012
37 Mio MT milk
Milk Milk
2020
64 Mio MT milk
Milk Milk
5,000 Liters/cow 7.5 Mio lactating cows
6,000 Liters/cow 10.7 Mio lactating cows
Milk price and feed price dev. 2006 – 2013
5 March 2015 7
USD/100 kg Milk (ECM)
Source: International Farm Comparison Network (IFCN); ECM: Energy Corrected Milk
Years
(start 2006)
USD/100 kg Concentrate Feed Mix
0
10
20
30
40
50
60
70
6 7 8 9 10 11 12 13
0
10
20
30
40
50
60
70
6 7 8 9 10 11 12 13
Nestlé Corporate Agriculture
Source: World Trade Atlas 2013 & Bloomberg
UAE
14%
HAY
EXPORTERS
Japan
44%
China
9%
S. Korea
19%
Aus.
28%
USA
51%
7%
6%
Global hay trade 2012
HAY
IMPORTERS
Nestlé Corporate Agriculture 5 March 2015 8
Source: HighQuest Partners, USDA and Earth Policy Institute
0
20
40
60
80
100
120
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
Global Pork Consumption (1961 to 2012)
Mill
ion
To
ns
1961
1967
1973
1979
1985
1991
1997
2003
2009 0,0
10,0
20,0
30,0
40,0
50,0
60,0
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
11
China
USMill
ion
To
ns
Pork Consumption in China & US (1975 -2013)
1975
1981
1973
1987
1985
1993
1997
1999
2005
20
11
Pork consumption in China
5 March 2015 9 Nestlé Corporate Agriculture
*2013 based on actual Q1 2013 figures x4.
-
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
China’s Soy Imports
6 yrs (1993-1998)
Ton
s
-
100.000
200.000
300.000
400.000
500.000
600.000
700.000
*
Ton
s
China’s Hay Imports
6yrs (2008- 2013)
Source: FAO, USDA & World Trade Atlas (June 2013)
Shall China import soybean and hay / meat and milk?
Nestlé Corporate Agriculture 5 March 2015 10
Rising imports of feed corn – rethinking self-sufficiency?
5 March 2015 11
Financial Time, Sept. 2013
2011 12 14 13 15 16 17 19 18 21 20 22
0
5
10
15
20
Chinese corn imports
(Forecast in million tons)
0 2 4 6 8 10 14 16 12
Taiwan
Japan
South Korea
Mexico
EU
China
Egypt
Iran
Colombia
Malaysia
The world biggest corn importers
(2013/14 forecast in million tons)
Nestlé Corporate Agriculture
The makeup of food waste (1/2)
Source: Lundquist et al. 2008
Field Household
1000
2000
3000
4000
Edible Crop
before Harvest
4600 kcal
Harvested crop
4000 kcal
Meat / Dairy
2800 kcal Food
consumed
2000 kcal
2600
kcal
5 March 2015 Nestlé Corporate Agriculture 12
The makeup of food waste (2/2)
Source: Source: H. Charles, J. Godfray et al. 2010
0 100
Developing
Countries
UK
USA
20 40 60 80
On-Farm Transport /
Processing
Retail Food
Service
Home and
Municipal
5 March 2015 Nestlé Corporate Agriculture 13
PEOPLE
LAND
WATER
ENERGY
CLIMATE
To ensure supply we have to smarter use natural
resources by
• Not wasting
• Not polluting
• Not destroying
and a good start is eradicating the worst and
promoting better
Sustainable Agricultural Practices.
Producing more food from the same area of land
while reducing the environmental impacts requires
what we call “Sustainable intensification of
Agriculture”.
Sustainable Agriculture Initiative Nestlé (SAIN)
NO FOOD WASTE
14 Nestlé Corporate Agriculture 5 March 2015
SAIN support instruments in Farmer Connect
5 March 2015 15
Financial Support
Schemes • Pre-financing
• Investment credits
• Bank guarantees
Technologies • Fodder/feed production &
conservation, planting material
• Animal health and welfare
• Biodigesters, irrigation
Economy of Scale • Bargaining power
• Price reductions through scale effects in procurement of agricultural inputs
Market Access and Price Stability • Organisation of Supply
Chain, Logistics
• Transparent pricing schemes and improve price stability
Education, Training & Extension • Good agricultural practices
• Standards (e.g. 4C, Utz, Rainforest Alliance, Organic)
• Vocational schooling, further education, agripreneurship
Nestlé Corporate Agriculture
Developing the next generation of farmers
Agripreneurship as a rural
development concept that…
• Focusses on developing
progressive farmers in rural
entrepreneurship
• Dairy farmers
Agripreneur Skills
* an agripreneur is and entrepreneur whose main business is in farming related activities
Nestlé Corporate Agriculture 5 March 2015 16
Expected outcome of Agripreneurship
• Social and economic benefits: Economically challenged agripreneurs are
providing their families nutritious food that is affordable, medical care and
schooling for their children
• Net income: They are selling their quality produce generating income and free
cash flow to sustain their family and grow their business
• Sustainability: Agripreneurs are learning and embracing sustainable farming
methods, and becoming players in the cyclicity of the agripreneurship system
• Next generation farmers: Farmers enabled to cope with future challenges of
sustainable farm development and production of raw materials such as cocoa
and coffee
Nestlé Corporate Agriculture 5 March 2015 17
Nestlé Dairy Farming Center, Shuangcheng
Nestlé Corporate Agriculture 18
The Nestlé Dairy Farming Centre (DFC) shall become
a center of competence that addresses the need of
creating the required human resources of trained farm
staff, dairy professionals and farm managers.
The center consist of:
• The Dairy Farming Institute (DFI)
teaches the theory and links up with
farm equipment and service
providers.
• Dairy Farms teach the practice;
students and professionals work on
the farms and get trained on
practical matters.
Opening 2014
5 March 2015
Nestlé supports self-sufficient agricultural school model in Paraguay
Self-Sufficient Agricultural Schools combine the teaching of traditional high
school subjects with high-quality technical and business training through a
hands-on education approach.
Nestlé Corporate Agriculture 5 March 2015 19
Business and practical skills are taught to
run profitable small businesses.
The school enterprises generate enough
income to cover the school’s operating costs
ensuring the affordability of education and
long-term financial sustainability.
This entrepreneurial model gives a platform
for students to lift themselves out of poverty.
Partner: Fundación Paraguaya
Opening 2013
Summary
• Dairy farmers shall become true agripreneurs, that are business orientated
and do farming by choice;
• Dairy farmers operate business models that make efficient use of resources
be it human or natural renewable resources;
• Dairy farmers are aware of the sensitivity of their produce and comply with
global safety and quality standards.
5 March 2015 20 Nestlé Corporate Agriculture
Dairy farmers produce a precious, high grade raw material with a
excellent nutrient composition for human consumption at all ages!
¡Siéntete orgulloso de ser un productor de leche!
Nestlé Corporate Agriculture 5 March 2015 21