Feed & Additive Magazine Issue 4 May 2021

MARKET REPORT 74 FEED & ADDITIVE MAGAZINE May 2021 CHALLENGES & UNCERTAINTY IN MILK INDUSTRY Covid-19 Effect: Although the food sector is less affected in general by the Covid-19 pandemic com- pared to other sectors, problems in supply chains of perishable foods such as milk and dairy products have become an important point of loss for the in- dustry. Again, the fact that places that provide mass food services such as restaurants & cafes were affect- ed firstly by restrictions was reflected as a decrease in the consumption of dairy products (although it varies according to consumption habits). Climatic changes: Especially grazing based pro- duction systems are significantly affected by climat- ic changes. According to the OECD-FAO report, world milk production may be restricted due to unforeseen weather events, especially due to grazing systems. Climate change also increases the likelihood of droughts, floods and disease threats, all of which can affect the dairy sector in various ways (e.g. price volatility, milk yield, cow inventory adjustments). Environmental regulations: Environmental con- cerns and environmental legislation to be created as a result of these concerns have a strong impact on the future development of dairy production and can change all current forecasts. Greenhouse gas emis- sions resulting from dairy operations account for a high proportion of total emissions in some countries (e.g. New Zealand, Ireland), and any change in re- lated policies could affect dairy production. The in- creasing trend towards sustainable practices such as water access and fertilizer management is additional areas where policy changes can be effective. Howev- er, stricter environmental legislation can also lead to innovative solutions that increase the long-term com- petitiveness of the industry. Animal diseases: Animal diseases and their spread can affect milk production. Mastitis is the most common infectious disease in dairy cattle and all farm sizes worldwide. It is also the most economical- ly damaging challenge that has a significant impact on milk yield and milk quality. Future advances in awareness, detection, and treatment of this disease may lead to significant increases in milk production through smaller losses. Antimicrobial resistance: Treatments based on antimicrobials are widely used to control many dis- eases, including mastitis. The overuse of antimicro- bials has raised concerns about the development of antimicrobial resistance that would reduce the effec- tiveness of existing treatments and require the devel- opment of new ones. The evolution of this process remains an uncertainty for the next decade. Plant-based products: In recent years, the role of plant-based dairy substitutes (e.g. soy, almond, rice and oat drinks) in the liquid dairy sector has increased in many regions. The growth rates of plant-based milk sub- stitutes are strong, albeit from a low base, but conflict- ing views exist regarding their environmental impact and relative health benefits. As a result, there is uncer- tainty about their long-term impact on dairy demand. Domestic policies of countries - bilateral trade agreements, etc: The domestic policies determined by the countries and the special bilateral trade agree- ments they have with other countries will affect the demand for dairy products and trade flows. References: • OECD-FAO Agricultural Outlook 2020-2029, 2020, https://doi.org/10.1787/1112c23b-en • Alltech Global Feed Survey 2021, https://one.all - tech.com/2021-global-feed-survey/ • Dairy: World Markets and Trade, United States De- partment of Agriculture, Foreign Agricultural Service, Dec 2020 • Gateway to dairy production and products, Food and Agriculture Organization of the United Nations, http://www.fao.org/dairy-production-products