Positive Underlying Future Trend Still Exists in Dairy Ingredients - Report

The world market for milk ingredients continues to grow by 3% annually in volume terms, but in terms of value, it is significantly down, as commodity prices have fallen by approximately 40-50% from their peak in the summer of 2007.

19/03/09 The market for milk ingredients has changed and moved into a new period of supply and demand imbalance with resulting price volatility, according to a new report on milk ingredients named. Despite the current build-up of stocks and consumer pessimism, there are clear signs of milk supply reductions that will rebalance the market and provide the stimuli for future volume and value growth, according to the authors of The World Market for Milk Ingredients 2008-2011, 3A Business Consulting,.

The world market for milk ingredients continues to grow by 3% annually in volume terms, but in terms of value, it is significantly down, as commodity prices have fallen by approximately 40-50% from their peak in the summer of 2007. However, the prices of the higher added-value milk ingredients e.g. milk protein isolates and milk protein hydrolysates have not shown the same volatility as the commodities whole milk powder, skimmed milk powder, casein and caseinates. Currently, it is estimated that the world market for milk ingredients is worth approx. USD 19 billion in 2008.

Despite the crisis, the main drivers for dairy still remain intact – the world’s population continues to grow, living standards in the long-term are improving, dairy consumption is increasing especially in the Asian-Pacific nations, and consumers are increasingly being motivated to buy products from a health and wellness perspective.

The report provides an overview of the current and expected future global market for milk ingredients. It is global in scope, with a comprehensive regional analysis of the EU, the US, Latin America, Eastern Europe, Asia-Pacific and Oceania markets. Furthermore, the report contains a specific chapter discussing the global market for high added-value dairy peptides specifically targeting the growing nutritional industry.

Specifically, the report covers whole and skimmed milk powders, casein and caseinates, milk protein concentrates, milk protein isolates, total milk proteins, hydrolysed milk proteins and peptides, milk permeate powder, milk minerals and colostrum/IgG. The headlines are:

• Global and regional market size (volume and value) and expected growth rates for all regions
• Breakdown of milk ingredient usage per industry sector in the US and EU markets
• Global survey of product launches containing milk ingredients
• Product properties and applications
• Production technology and patent applications
• World trade flows
• Industry trends, price analysis and outlook 2008-2011

Given the definition of regions contained within this report, it turns out that Asia-Pacific is the single major dairy market in the world, with a market value of approx. USD 7 billion in 2008. Furthermore, it is the largest import market in the world importing approx. 30%, or 1.1 million MT, of all milk ingredients traded on the world market. Europe and the US milk ingredient markets remain domestically supplied and are worth respectively USD 4.6 billion and USD 3 billion in 2008.

Looking at the world market, Oceania (consisting of New Zealand and Australia), the EU and the US are the largest suppliers, exporting respectively 1,300,000 MT, 680,000 MT and 430,000 MT of milk ingredients in 2008.