DAIRY CONSOLIDATION A PROCESSOR PERSPECTIVE Wisconsin Agricultural Outlook
- Slides: 8
DAIRY CONSOLIDATION: A PROCESSOR PERSPECTIVE Wisconsin Agricultural Outlook Forum January 29, 2019 Sue Taylor VP, Dairy Economics & Policy Leprino Foods Company
Leprino’s Global Footprint • Primary production in US with JVs in UK & Brazil • Our products are found in 50+ countries • We employ over 4, 000 people worldwide
Total Cheese Plants US Cheese Plant Trends 1, 600 1, 400 1, 200 1, 000 800 600 400 200 0 25 20 15 10 5 0 1960 1970 1980 Plants 1990 2000 Million Pounds per Plant Data Source: USDA NASS Quick Stats Million Pounds Cheese per Plant MANUFACTURING SECTOR NOT IMMUNE TO CONSOLIDATION
US Cheese Plant Trends Total Cheese Plants 1, 600 25 1, 400 -Plant numbers bottomed in 1999 -Shift due to increase in small artisan cheese plants to address market trends? 1, 200 1, 000 800 600 400 200 0 1960 1970 1980 Plants 1990 2000 2010 20 15 10 5 0 Million Pounds per Plant Data Source: USDA NASS Quick Stats Million Pounds Cheese per Plant BUT, THERE’S ROOM FOR SMALLER PLANTS
TOP 20 DAIRY COMPANIES - HISTORICAL PERSPECTIVE 5 Source: Rabobank
Cayer. JCB Group Lo. L Tulare AMPI Southern Independent Coop Milk Prod. Assn. Valley of Virginia Milk Black Hill Milk Producers Fromage Cote SA NZ Dairy Group Kiwi Cooperative Dairies Twee Provincien Milchwerke Köln/Wupp ertal IDB Belgium N. V. G. Den Hollander Holding BV Ivory Coast Anika Foods Russia DEK srl Italia
1989 Associated Fresh Foods UK Danmark Protein Hellevad Omegns Andelsmejeri National Cheese Company 2012
WHAT ARE THE IMPLICATIONS? • Milk marketing / procurement structures – Role of cooperatives • Market specialization to address segmentation – Coordinated supply chains to target consumer groups with specific preferences – Segmentation to address different markets • Undifferentiated • Differentiated • Pharma • Ownership models
