Global dairy demand set to overtake supply within 10 years

Tetra Pak Marketing Pty Ltd
Tuesday, 07 October, 2014

Global demand for dairy is set to overtake available supply in the next decade, according to the 7th Tetra Pak Dairy Index. The report shows a widening gap between developed and emerging dairy markets across the globe.

The report warns that producers in both developed and emerging dairy markets need to address the careful balancing act required to ensure sustainable business success.

Global dairy consumption is predicted to rise by 36% by 2024, the report shows, driven largely by population growth and rising prosperity and urbanisation in Africa, Asia and Latin America.

However, milk supply and demand is imbalanced across the world - rising demand in emerging dairy markets is unlikely to be fulfilled by locally produced raw milk, while developed dairy markets producing a milk surplus face the challenges of competing for the export and responding to falling domestic consumption.

“The predicted surge in global demand offers a huge opportunity for dairy companies in developed markets to export powder and ambient liquid dairy products to growing economies. However, to ensure long-term success, these producers need to balance the ‘quick wins’ of export against the requirement to continue to grow their domestic markets,” said Dennis Jönsson, president and CEO of Tetra Pak Group.

“Meanwhile, dairy companies in import markets must overcome the challenge of securing a sustainable, high-quality milk supply while keeping pace with growing demand. Markets such as China and Saudi Arabia are doing so in multiple ways: increasing investment in domestic dairy farming, partnering with well-established foreign companies, and diversifying their offer with value-added products.

“Fundamentally, these are measures that will help to achieve the vital balancing act of shoring up the future of a sustainable dairy industry.”

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