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BULGARIAN DAIRY
SECTOR WITHIN THE
COMMON EUROPEAN
MARKET
INTELLIGENT SOLUTIONS
FOR THE AGRIBUSINESS
NIKOLAY VALKANOV
15
2007m01
2007m04
2007m07
2007m10
2008m01
2008m04
2008m07
2008m10
2009m01
2009m04
2009m07
2009m10
2010m01
2010m04
2010m07
2010m10
2011m01
2011m04
2011m07
2011m10
2012m01
2012m04
2012m07
2012m10
2013m01
2013m04
2013m07
2013m10
2014m01
2014m04
2014m07
2014m10
2015m01
The farm gate price of raw milk in Bulgaria
follows that in EU 28
Raw milk price in Bulgaria and EU (euro cents per liter)
45
40
35
30
Bulgaria
25
EU 28
20
Source: EC
The price of Bulggarian milk in the beginning
of 2015 is relatively high
Average farm gate price for milk as of January 2015 in
euro cents per liter
31,72
31,52
31,33
31,01
30,79
30,25
30,01
29,76
29,65
29,31
28,64
28,55
Bulgaria
Germany
Sweden
Luxemburg
Slovakia
Netherlands
Romania
Czech Republic
Slovenia
Belgium
Hungary
Poland
24,82
22,91
22,79
Estonia
Lithuania
Latvia
Source: EC
Bulgaria and Romania are uncompetitive on EU
level
Average dairy farm in EU
450
396
400
350
300
250
ЕС 15
200
ЕС 10
150
100
50
0
ЕС 2
109
52
19
5
heads per farm
7,3 5,7 3,4
16
productivity per cow productivity per farm
Source: EU Dairy Farms Report 2013
Comparison between some EU countries and
Bulgaria shows even greater problems
Heads per
farm
Average
productivity
per head
Milk
production
(tons)
Income from
milk in EUR
Bulgaria
13
3
40
19 381
Poland
16
5
86
39 300
Ireland
62
5
337
158 244
Netherlands
82
8
654
313 754
Hungary
76
7
544
363 289
Source: FADN
1
The milk quota abolition will lead to an
increase in the milk surplus in EU
Production and consumprion of milk in EU 28 (m t)
and forecast to 2022
160
150
140
production
130
consumption
120
110
100
2011
2012
2013
2014
2017
2022
Source: EC, own calculations
Selection control is carried on under 1/5 of
animals in Bulgaria
• Average number of animals in I category farms (that meet EU
quality standarts) is 42 in 2014 and hardly changed since 2007
2010
2011
2012
Holstein – Dobrich
5,6
6,5
7,3
Holstein – Ruse
5,3
5,3
5,6
Brown cattle
3,7
4,9
5
4
4
4
Montbeliard
5,9
5,8
5,5
Simmental
5,4
5,2
5,1
Bulgarian cattle
• 18% of the animals supply 30% of the milk
The economic analysis shows the need for a
rapid improvement of efficiency
• We studied three segments – farms with up to 9 dairy cows,
from 10 to 19 dairy cows and from 20 to 49 milking cows;;
• We calculated the potential financial result, which can be
reached in the three segments based on certain assumptions;
• We tested the financial results in three productivity levels - 3
tons per head, 5 and 7 tonnes;
• We tested the financial results at four price levels – 45, 55, 65
и 75 stotinki/liter;
• We considered the price of milk is moving in accordance to
cost of feed;
• Farms that operate by the rule of law (not in the shadow part
of the economy)!
1
Farms with up to 9 dairy cows
• 80% от dairy farms with 30% of animals;
• Maintenance of such a flock is economically unjustified,
unless the owner has no additional income from other
activities;
• With milk yield of 3 tonnes per head the generated income is
below the official poverty line for the country;
• With milk yield of 5 tons potential income of a household is
approximately equal to the income generated from minimum
wage;
1
Farms between 10 - 19 dairy cows
• Maintaining a farm with 20 animals and average milk yield of
3 tons is not economically justified;
• At an average yield of 5 tons/cow a farm can not be
sustainable if farm gate prices decrease below 55 st/l;
• Farm with 15-20 animals and over 7 tons yield can be
relatively stable even in times of price shocks;
1
Farms between 20 - 49 dairy cows
• These are 4% of all farms that breed 1/4th of the cows in
Bulgaria;
• With the expected price dynamics in the coming years, an
average yield of at least 7 t/head is absolutely necessity;
• Closing the production cycle by processing may be a good
solution for some farms.
1
Coupled support for 2015
Dairy cows
Cows or heifers for meat
Dairy cows and / or cows for
meat under selection control
• Farms >10 dairy cows – BGN 240 /head
• Farms > 5 cows or heifers – BGN 223 /head
• Farms > 10 cows – BGN 387 /head
1
The fundaments of a successful dairy farm are
well knows:
Proper
genetics
Quaity Feed
Good
Management
INTELIAGRO IS:
• NGO for public benefit
OUR MAIN GOAL:
• Development of sustainable and competitive agriculture
AND WE PLAN TO FULFILL IT BY:
• Gathering an expert team and building a platform that
provides access to information, analysis, data and expertise in
key areas of agriculture
PUBLIC BENEFIT
• Analysis on strategic issues;
• Public hearings;
• Comments and impact
assessment of public policies;
• Maintenance of databases
with statistical information on
the sector:
•
land use
•
crop breeding
•
livestock breeding
•
macro data
INTELIAGRO WILL LINK PEOPLE WITH EXPERIENCE AND
KNOWLEDGE TO THOSE IN NEED
Agronomists
Analysts
Irrigation techniques
Financial
consultants
Zooengineers
Experst in animal
feeding
HOW WE CAN SERVE YOU
•
•
•
•
•
Initial assessment of a project;
Financial analysis;
SWOT analysis of the investment project;
RDP projects writing;
Consultation on the basis of soil samples; Tips for
growing crops; selection of appropriate cultivars and
rootstocks;
• Preliminary, feasibility study and project consulting and
implementation for dairy farms;
• Subscription service for timely notification in the event
of legislative changes;
• Market research, analysis and forecasts.
4
Thank you
www.inteliagro.bg
[email protected]