Thirst for milk

Today I will join dairy farmers from all around the Philippines at the national Dairy Congress in General Santos City. This will be my third annual Congress, a chance to connect with the local dairy industry and to underline New Zealand’s support.

Although agricultural production in the Philippines is more often associated with rice and tropical fruits, including the bananas stocked in New Zealand supermarkets, dairy farms are found across much of the country. Most dairy farmers in the Philippines have very small herds. As of December 2013, according to statistics from the National Dairy Authority, there were a little over 21,600 dairy cows in the Philippines (excluding carabao, of which there are nearly 2.5 million).

Many Filipinos already know that there are more sheep (around 30 million) than people (4.2 million) in New Zealand. There are also more cows (6.2 million).

One of the trends in recent years in New Zealand agriculture has been for farmers to convert from sheep to more profitable dairy farming.

Just as world food demand is increasing, so too is demand for dairy products in particular. Economic growth in the developing world is enabling more and more people to afford to buy nutritious food, of which dairy is a fine example. With a small dairy production base, the Philippines is reliant on imports to meet its dairy consumption needs. Accordingly, the Philippines is a key market for New Zealand dairy exports.

The New Zealand dairy industry has calculated that the world will require an additional 100 billion litres of milk by 2020 – that’s around 40,000 Olympic size swimming pools full of milk. To put this in perspective, production from NDA-assisted dairy farms last year accounted for a total of 14.42 million liters of milk, or around six Olympic swimming pools. And although New Zealand accounts for the greatest share of world milk trade (but only the eighth largest producer overall), it is estimated that New Zealand will be able to account for only around 5% of the increase required by 2020.

Much of that demand will need to be met in the developing world. For this reason, we are seeing more and more initiatives to boost dairy farming internationally, including here in the Philippines. The New Zealand Government, for its part, has committed to helping the Philippine dairy industry develop, in partnership with the National Dairy Authority and local dairy industry partners. The Philippines-New Zealand dairy project is providing support to a select number of farms in two regions where dairy is already established: Northern Mindanao and CALABARZON. The idea is to then share more widely the key lessons. Given the size of the Philippine dairy herd, a project of this scale — $NZ 5.3 million, or P200 million, of support over five years — should significantly raise milk production in these regions if it is well executed.

As I have written before, there is no doubt that the Philippines has great agricultural potential, and in dairy there is much scope for farmers to further increase their milk production. Fresh milk produced by the local industry is in demand, be that for schoolchildren in the provinces, latté coffee at Starbucks or fresh butter at Manila’s top hotels. The kiwi perspective is that demand for protein is going to continue to soar, and that’s something that farmers the world over — including this week in General Santos City — can celebrate with a milk toast.

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(Reuben Levermore is the Ambassador of New Zealand.)