Milk Marketing

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Del curso dictado por The Pennsylvania State University

Dairy Production and Management

298 calificaciones

The Pennsylvania State University

Dairy Production and Management

298 calificaciones

With the world's first MOOOOO-C, you will gain a broad and comprehensive understanding of all aspects of dairy management such as genetics, nutrition, reproduction, animal health, farm economics, and sustainability of dairy production systems. There's something here for everyone whether you are just looking for the basics or have years of experience in the dairy industry. This is an eight-week course. Each week consists of four to nine video lectures, additional reading materials, and a multiple-choice questions quiz. Estimated study time is between three and five hours per week. Learners have the option to purchase a Course Certificate for 49.00 USD. The certificate can be purchased at any time, but you must verify your identify before taking the course quizzes in order to be eligible. For those who cannot afford the certificate fee, financial aid is available through Coursera. Why is producing milk efficiently and sustainably so important? Milk provides humans with over 16 essential nutrients, such as: Energy, Protein and Essential Amino acids, Vitamin A, Vitamin D, several B vitamins, including B12, Pantothenic and Folic acids, and essential minerals such as Calcium, Magnesium, Phosphorus, Potassium, Zinc, as well as other minerals. Did you know that one glass of milk provides a 5-year old child with 21% of his/her daily protein requirements and 8% of their energy needs? Most milk in the world, about 85%, is produced from cattle. However, water buffaloes, goats, sheep, and camel are also dairy animals. The United States, India, the European Union, Brazil, and New Zealand are among the largest dairy producers in the world. Yet among these dairy-producing countries there are varied methods to generate milk with highly variable productivity and efficiency. Dairy production is vital for the survival of billions of people. Globally, around 150 million small-scale dairy households, equivalent to 750 million people, are engaged in milk production. The number and size of dairy farms varies among countries, but in India alone, there are estimated 78 million dairy farms! In the United States, one of the leading milk-producing countries in the world, total milk production has been steadily increasing in the last decades, reaching over 205 billion pounds (93 billion kilograms) in 2014. This was accompanied by a steady increase in average milk yield per cow, reaching 22,260 lb (over 10,100 kg) per lactation in 2014. How has this efficiency been achieved? What methods are necessary to ensure production of high quality milk? How do we balance milk production efficiency with animal health and environmental protection? This course will provide the student with information to better understand dairy production systems and their role in feeding the world population. In this MOOOOO-C, you will learn about the dairy enterprise from internationally recognized dairy science professors who have delivered highly regarded dairy education programs within the United States and internationally. Course lectures are translated into Portuguese and Chinese; PDF files of these translations can be found under each course week. The Dairy MOOC team thanks Dr. Antonio Branco (Universidade Estadual de Maringá, Brazil) and Ms. Yuanyuan Zhang (Pennsylvania State University) for translating the lecture materials. Course Sponsors This course was supported by the generous contributions of Innovation Center for US Dairy at Silver Level and Pancosma North America, RP Nutrients, Inc. and Arm and Hammer, which provided funding support at a Bronze Level. The Pennsylvania State University has final responsibility for the academic content of this course.

De la lección

Farm Economics and Environment

In Week 8 of the course, you will learn about the basics of dairy farm management and identify some key aspects of farm level economics that impact farm productivity and profitability. From crops to cows to cash, the dairy farm is an economic engine that has positive impacts on local communities. The second part of this series expands on dairy’s local impact to provide a global view of dairy markets around the world. From price volatility to seasonal milk supplies, the world marketplace for dairy products is complex. In the last lectures of this course we will discuss the environmental implications of dairy production and strategies for decreasing nitrogen, phosphorus, and greenhouse gas emissions from dairy operations. Those of you, who would like to get more engaged in discussions and are interested in completing the Course Certificate requirements, can participate in discussion forums and take the weekly quiz. Enjoy this week's material and the entire course!

Dairy Farm Management7:01

Dairy Farm Economics6:12

Dairy Markets8:11

Milk Marketing7:20

Conoce a los instructores

Alexander N. Hristov
Professor of Dairy Nutrition
Animal Science
Troy L. Ott
Professor of Reproductive Biology and Associate Director
Huck Institutes of the Life Sciences
Bhushan Jayarao
Resident Director
Penn State Animal Diagnostic Laboratory (ADL)
Greg Roth
Professor of Agronomy
Plant Science
Gabriella A. Varga
Distinguished Professor of Animal Science
Dairy and Animal Science
Chad Dechow
Associate Professor of Dairy Cattle Genetics
College of Agricultural Sciences
Robert Van Saun
Professor of Veterinary Science and Extension Veterinarian
Department of Veterinary and Biomedical Sciences
Kathy Soder
Research Animal Scientist
USDA-Agricultural Research Service, Pasture Systems and Watershed Management
James Dunn
Professor of Agricultural Economics
Agriicultural Economics, Sociology and Education
Lisa A. Holden
Associate Professor of Dairy Science
Animal Science

[MUSIC]

This is Jim Dunn again, and I'm going to be talking about milk marketing.

Marketing milk is a challenge, especially for small farms.

For this reason, in many countries farmer cooperatives market most of the milk.

The specifics vary by cooperative and country, but the essential services

provided are that the cooperative finds a customer, arranges transportation,

collects the revenue from the milk sales and pays the farmer the difference between

the milk receipts and the cost of the cooperative services.

Because milk needs to be processed in a timely manner,

the cooperative collects it at least every other day at the farm.

Some bigger farms can fill an entire truck in one day,

so their milk is collected daily.

In areas where the farms tend to be very small,

there's often a village collection station.

In this instance, the farmers will transport a few cans of milk to

the collection station, where it is measured and poured into the bulk tank.

Generally, there is no sample taken of each can,

so any quality problems are commingled in the village milk production of the day.

In warm weather, this milk is kept at room temperature until the tank's cooling

system lowers the milk to a temperature that will deter bacterial growth.

This photograph shows somebody delivering milk to the village collection

station in Serbia.

In this case,

three milk cans per day on their bicycle with a little cart behind it.

People also brought milk in single cans,

wheelbarrows and on the back of motorcycles and various other things.

This next slide is a milk truck that was

collecting milk at a farm that had ten cows.

It was going to make 70 stops with this truck.

In contrast to that, the following slide shows the typical milk truck in

the United States, which might fill this 40,000 pound

truck with milk from a single farm or several farms.

Perhaps as many as 10 or 20, but

generally not very many compared to the 70 farms in the preceding slide.

Because a cooperative must find a market for every member's milk,

it must have a variety of customers including factories processing milk for

drinking, making cheese, ice cream, butter, and powdered milk.

On any given day each of these factories has a need for

a particular amount of milk.

The cooperative must balance its supply with the needs of each customer.

The amount that the factory is willing to pay and

the delivery cost to get the milk to that factory.

You must also have a prearranged procedure for determining quality, getting paid, and

other requirements.

Since the milk truck will usually contain milk from several or

many farms, there must be a trace back procedure in place to determine

which farm is the source of any quality problem the milk in the load has.

This may involve traces of pharmaceutical products, high bacteria, or other issues.

One challenge for the cooperative is governance.

Is each farmer equally important?

Do some get special status?

In the United States, the largest farms have thousands of cows and the smallest,

perhaps, as few as ten.

These differences mean that some of the farmers have

a much larger role in the viability of the cooperative,

and perhaps different priorities about the future direction for the cooperative.

An important determiner of milk prices in the United States are now futures markets.

The Chicago Mercantile Exchange hosts trading of contracts for

cheese, butter and nonfat dry milk.

These publicly traded contracts are used to guide market participants about present

and future milk supply and demand for these products and milk in general.

The US farm prices are derived from the prices of these contracts at

various times.

And a formula is applied to compute the value of milk use to make the cheese,

butter, and other products.

The price the farmer receives is a weighted average of the farm milk prices,

used to make the different the types of products in their region.

Most countries make a distinction between drinking milk in further

processed products with a higher farm price for milk used for drinking.

This is to encourage farmers to produce milk during the off season.

Because the demand and supply for milk are so seasonal, farmers and

processors face considerable price uncertainty.

The futures market offers a method of controlling this risk.

You can see by this slide that the price of milk has varied

considerably over the last decade, and

it can sometimes lose as much as 50% of its value over a couple of months.

Cooperatives often help farmers to control price risks by offering forward

contracts for milk.

They do this in two ways.

For example, the cooperative may find a customer such as a pizza company,

that knows it'll be making a lot of pizzas in the next few months,

and does not want the costs of these pizzas to vary greatly.

The pizza company may approach the cooperative about a fixed price contract

for the cheese, for 100,000 pizzas over the next six months.

The cooperative can offer its farmer members the opportunity to fix the price

of a portion of their milk production, generally up to 75% over that period.

A farmer will get stable prices and

a predictable income from the sale of the milk.

The pizza company can make better plans, and the cooperative provides a valuable

service to the members and guarantees a market for a portion of its milk sales.

In addition to these pass-through contracts,

cooperatives will also provide risk management services for

farmers to obtain contracts for forward pricing of dairy products.

These contracts are for the milk prices themselves and for cheese, butter, and

powdered milk prices.

Depending on where the farm is located,

the farm milk price may be more related to one or more of these products.

Of course, the farmer can also use a regular commodity broker for

these transactions.

Using the cooperative as the intermediary simplifies the process and

allows smaller farms to control price risk in this manner.

The cooperatives often provide other services such as record keeping,

various supplies, and insurance.

The bigger cooperatives can vertically integrate into manufacturing.

Land O' Lakes for example, is a long time butter manufacturer of the United States.

And Dairy Farmers of America, another large cooperative, has joint

ventures with many dairy processors, producing cheese and many other products.

In the process, these cooperatives offer their farmer-members

the opportunity to share in the profits of the dairy industry beyond the farm gate.

Occasionally, dairy farmers can vertically integrate in direct consumer sales and

dairy product manufacturing.

Small on-farm cheese plant may produce a storable product that the farmer can sell

directly to the consumer at a farmer's market or at the farm gate itself.

Others may bottle milk, or make yogurt, or other customer dairy products.

This allows a farmer to realize more value for the milk, and

to use some surplus time to get a greater return from the milk produced.

This opportunity is very location specific and not available to all producers.

But for those in the right situation and

with entrepreneurial skills, it can increase and

stabilize income, and increase the viability of the smaller operation.

These opportunities depend on regulations about food safety and

licensing, which can vary greatly by country.

Milk marketing is a challenge, and the farmers rarely have the time or

skills to manage it as individuals.

Thus a system of intermediaries is often needed, generally cooperatives.

[MUSIC]

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