THE MPO’S 2020 VISION AND BEYOND

Press release: for immediate release

Media Day

7 February 2020

Pretoria

The Milk Producers’ Organisation (MPO) invited agricultural media representatives to their first media day of the year held on Friday, 7 February, at the national MPO offices in Val de Grace, Pretoria. The MPO shared their vision and specific 2020 projects to enable sustainable dairy farming for all in the South African dairy industry.

Colin Wellbeloved, chairman of the national MPO, said in his opening address that he regards the MPO as a body whose main aim is to advance and promote South African dairy production at world-class standards. Membership to the MPO provides access to a platform where dairy producers can voice legitimate concerns and where these issues can be tackled daily as a collective.

2020 strategy and beyond

Dr Chris van Dijk, chief executive of the MPO, delved into the organisation’s strategy, highlighting key drivers to enhance the relevancy and resilience of the MPO through member engagement. He explained that the customer is put first by optimising communication to members, aligning value-added services, actively participating in transformation and commercialisation initiatives, and pro-actively acting on health, welfare, and environmental issues. The MPO team aims at day-to-day activities to inspire a uniform vision, create a common understanding of constraints, distil clear opportunities, and give the dairy farmers the agility to sustainably succeed!

Barbara Bieldt, regulatory services and stewardship manager of the MPO, said the MPO was excited about the versatility of milk and reported that brand awareness is built around milk as a vital part of a healthy lifestyle. Initiatives include the World Milk Day campaign in partnership with the Consumer Education Project (CEP) of Milk SA and the National School Milk Day campaign in partnership with the Department of Education and CEP of Milk SA, in which the MPO plays a coordinating role.

Philip Swart, member services manager of the MPO, reminded the audience that a member-centric focus is at the heart of information and technology transfer initiatives to assist dairy farmers to be productive and gain a competitive edge. The dairy producer is the most important stakeholder in the value chain, so the regional footprint has been strengthened with new appointments in KwaZulu-Natal and Eastern Cape. The MPO strives to work hand in hand with its dairy producers by meeting more regularly on farm and through farmer days. Visit mpo.co.za for a detailed list of regional activities throughout the year and partner with us.

Bertus van Heerden, chief economist of the MPO portrayed the economic picture.

Better times for the primary dairy industry

Most variables in the South African dairy market indicate stern financial improvement for the primary dairy industry in 2020; the main potential drivers being producer prices and the feed cost base. These variables are supported by developments and market sentiment in the international market. This improvement will assist dairy farmers to recover some of the losses incurred in 2019, but recovery will move at a slow pace.

International dairy product prices in United States (US) dollar terms are, on average, 21% more expensive than a year ago. The main reason for the surge in prices is the limited availability of exports from the big exporting countries due to a marked decrease in unprocessed milk production. Typically, growth in milk production in the US and the European Union (EU) would be between 1% and 2%, but for the first 11 months of 2019 it was 0,3% and 0,4%, respectively. The market reacted and producer prices in the US increased, on average, by 34% from a year ago, New Zealand by 13%, while the EU producer prices are exhibiting upward momentum since March 2019.

Unprocessed milk production in South Africa stagnated during 2019 on the back of poor producer prices and the increased cost-price squeeze that was exacerbated by the milk-to-feed price ratio, which dropped below 1:1,4 in May 2019, and is currently below 1:1,2. At this level, production will be slow and autumn is on our doorstep. An impressive result is that despite severe climate and economic challenges, South Africa remained a nett exporter of dairy products in 2019, with imports at the same level as in 2018, while exports reduced slightly by 1% from 2018 to 2019. Very few countries in the world are self-sufficient in terms of milk production, and the inclusion of South Africa in this group of countries is a tremendous feather in the cap of the South African dairy farmer.

There are some risk factors in 2020 that could reduce the quantum of the potentially improved financials for the primary dairy industry, and these largely relate to the poor performance of the South African economy. Another developing risk factor is the effect of the novel coronavirus outbreak on world trade. One of the world’s largest buyers (China) is cocooning themselves, which will affect the demand for various products, including dairy. When export flows are disrupted, the product typically ends up in other markets at reduced prices.

On the training front

The MPO is an accredited training service provider that operates within partnerships to make an impact across the livestock sector. In 2020, specific training initiatives will focus on a dedicated dairy school for future compulsory community services (CCS) veterinarians, and courses on code of practice, biosecurity management, and dairy production management to deployed CCS veterinarians and animal health technicians that operate in rural areas.

There will be a specific community focus in four rural communities (two districts each in two provinces) rolling out a series of courses in partnership with the Agricultural Research Council (ARC) and the Department of Agriculture, Land Reform, and Rural Development, based on a skills audit analysis conducted by the ARC. In addition, the MPO will offer biosecurity workshops across three provinces.

Helene Pheiffer, training and transformation services manager of the MPO, was also excited to share the news of a dairy product sensory evaluation course developed in partnership with the Western Cape Department of Agriculture, to promote the standard of the South African Dairy Championships and the Qualité Awards – flagship events of Agri-Expo.

All in all, the dairy industry is a beautiful industry, and it was a proudly South African dairy day!

Follow #MilkMpo on Twitter and @MilkProducersSA on Facebook, or visit mpo.co.za for more information.

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