Dairy production and trade

What is it about?

Summary of "Growth and Instability in Dairy Production and Trade: A Global Analysis" by Ramphul Ohlan (2014) Published in: International Journal of Trade and Global Markets (Inderscience Publishers) DOI: 10.1504/IJTGM.2014.062856 Key Focus of the Study Ohlan's paper examines the long-term trends, growth patterns, and instability in global dairy production and trade. It analyzes how different regions contribute to dairy supply chains and identifies factors causing fluctuations in output and trade volumes. Main Research Questions How has global dairy production and trade evolved over time? Which regions show the highest growth vs. instability in dairy output? What are the key drivers of volatility in dairy markets? How do trade policies impact dairy export-import dynamics? Methodology Uses time-series data (likely from FAO, WTO, or national databases). Applies compound annual growth rates (CAGR) to measure production/trade expansion. Evaluates instability indices (e.g., Coppock’s instability index) to assess volatility. Compares trends across developed vs. developing countries. Key Findings 1. Growth in Dairy Production & Trade Emerging economies (e.g., India, China, Brazil) showed rapid growth due to rising demand and investments. Developed nations (EU, U.S., New Zealand) dominated exports but faced slower growth rates. Trade liberalization (e.g., WTO agreements) boosted cross-border dairy flows. 2. Sources of Instability Supply-side shocks: Climate variability (droughts), animal diseases (e.g., foot-and-mouth). Demand fluctuations: Changing consumer preferences (e.g., plant-based milk shifts). Policy impacts: Subsidies (EU’s CAP), export bans (India’s SMP restrictions), tariffs. Price volatility: Linked to feed costs (soy, corn) and energy prices. 3. Regional Differences Asia: High growth (India’s "White Revolution"), but inconsistent due to monsoons. Oceania (NZ/Australia): Export-driven, vulnerable to global price swings. Africa: Low productivity but rising demand strained imports. 4. Trade Dynamics Net exporters: EU, New Zealand, U.S. dominated, but faced competition. Net importers: Middle East, Southeast Asia relied on volatile global markets. Policy & Economic Implications Risk management: Calls for buffer stocks/insurance to stabilize dairy markets. Technology adoption: Improving cold storage, breeding, and feed efficiency in developing nations. Trade reforms: Reducing subsidies (e.g., EU milk quotas) could level competition. Sustainability: Highlights environmental costs (methane emissions, water use). Critiques & Limitations Pre-2014 data: Misses recent trends (e.g., China’s dairy import surge post-2020). Simplified metrics: Instability indices may not capture geopolitical shocks (e.g., Russia-Ukraine war’s impact on feed grains). Non-tariff barriers: Less focus on food safety standards (e.g., EU’s strict dairy import rules). Why This Study Matters Food Security: Dairy is a critical protein source; instability affects nutrition. Livelihoods: 150M+ smallholder farmers depend on dairy globally. Global Trade: Dairy is a $700B+ industry; volatility disrupts supply chains. Follow-up Research Needed: Impact of climate change on dairy yields (e.g., heat stress on cattle). Role of alternative milks (oat, almond) in market disruption. Conclusion Ohlan’s work provides a comprehensive baseline on dairy market dynamics, emphasizing the tension between growth and instability. Policymakers can use it to design resilient agricultural policies, while businesses may assess global trade risks.

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Photo by Elena Leya on Unsplash

Photo by Elena Leya on Unsplash

Why is it important?

Why Ohlan’s Study on Dairy Growth and Instability is Important Ramphul Ohlan’s 2014 analysis of global dairy production and trade remains highly relevant due to its insights into food security, economic stability, and trade policy. Here’s why it matters: 1. Food Security & Nutrition Dairy is a critical source of protein and micronutrients (e.g., calcium, vitamin D) for billions, especially in developing nations. Volatility in production (due to climate shocks, diseases) can lead to price spikes, making dairy less affordable for poor households. The study helps identify high-risk regions (e.g., Africa’s import dependency) needing policy support. 2. Economic Stability for Farmers Small-scale dairy farmers (e.g., in India, Kenya) rely on stable markets for livelihoods. Ohlan’s instability metrics reveal how price crashes (e.g., EU milk glut in 2015) or feed cost surges hurt rural incomes. Policymakers can use this to design safety nets (e.g., India’s dairy cooperatives, EU subsidy reforms). 3. Global Trade & Geopolitics Dairy is one of the most traded agricultural commodities (e.g., NZ exports 95% of its milk). The study highlights how trade barriers (tariffs, export bans) worsen shortages (e.g., infant formula crises). Recent example: Ukraine war disrupted grain/feed exports, raising dairy production costs globally. 4. Climate Change & Sustainability Dairy accounts for ~4% of global GHG emissions (FAO). Ohlan’s work indirectly flags risks like: Droughts → Lower cattle feed supply → Production drops. Methane emissions from herds → Regulatory pressures (e.g., EU’s carbon pricing). Helps argue for climate-resilient dairy systems (e.g., India’s biogas-from-dung programs). 5. Policy & Investment Decisions For governments: Guides subsidy reforms (e.g., EU’s post-2014 quota abolition) and import diversification (e.g., China’s investments in NZ farms). For agribusiness: Identifies growth markets (Southeast Asia’s rising demand) vs. risky regions (climate-vulnerable Africa). For development agencies: Supports projects to reduce spoilage (cold storage in India) and improve breeds (African dairy hubs). 6. Limitations & Evolving Challenges While foundational, Ohlan’s 2014 study needs updates on: Post-COVID disruptions: Labor shortages, logistics bottlenecks. Alternative milks: Almond/oat milk now claim ~15% of the U.S. market. Gene-editing: CRISPR cattle for heat/disease resistance could reshape production. Key Takeaways for Today Dairy instability = Hunger risk → Requires global buffer stocks. Trade wars hurt poor consumers → Need WTO-level dairy agreements. Climate adaptation is urgent → Drought-resistant fodder, methane-reducing feed. Follow-up Question: Should India prioritize dairy self-sufficiency or integrate deeper into global markets?

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