All dried up: Sharp falls in global milk prices have squeezed industry margins

Operators in the Milk Powder Manufacturing industry have faced challenging conditions over the past five years. Volatile commodity prices have influenced strong revenue fluctuations over the period. As a significant portion of the industry’s revenue is derived from exports, the industry’s performance is susceptible to changes in the global price of milk powder. Global milk powder prices rose prior to the current five-year period and stayed high until their peak in 2013-14. Prices subsequently collapsed over the two years through 2015-16 amid concerns about excessive increases in milk powder supplies, contributing to plummeting industry revenue early in the period. Primarily due to these initial declines, industry revenue is expected to fall at an annualised more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Volatile commodity prices have driven strong fluctuations in industry revenue
  • Domestic milk powder production volumes have fallen over the five-year period
  • Milk powder exports are forecast to increase over the next five years, lifting industry revenue
  • Industry Report - Starting a New Business Chapter

    The size of major players that are vertically integrated with a range of dairy operations may prove the biggest barrier for new entrants. Well-known and established major players such as Fonterra and Saputo pose a challenge to new entrants. Although branding is less important for milk powders, these two big players all own and operate on a national scale and are capable of supplying large contracts. Established players have strong balance sheets and are able to gain the trust of farmer suppliers by ensuring all milk supplied will be paid for. The biggest economies of scale are derived from running individual factories at capacity, but additional economies can be gained from having a network of factories and establishing strong brand-named products. Wit...purchase to read more.

    Additional Insights for the Milk Powder Manufacturing Industry

    IBISWorld has determined the most important Key Success Factors for the Milk Powder Manufacturing are:

  • Guaranteed supply of key inputs
  • Economies of scale
  • Output is sold under contract - incorporating long-term sales contracts
  • IBISWorld analysts also discuss how external factors such as Milk consumption and Milk production in the Milk Powder Manufacturing industry impact industry performance..

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    What's in this report

    What is the Milk Powder Manufacturing Industry?

    Industry operators manufacture milk powder, powdered milk-based beverages and baby foods in powder form.

    Industry Products
  • Whole milk powder
  • Skim milk powder
  • Buttermilk powder
  • Industry Activities
  • Milk powder
  • Milk-based baby food powder
  • Health beverage powder
  • Malted milk powder
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Milk consumption
  • Milk production
  • Domestic price of milk
  • Trade-weighted index

  • Current Performance
  • International influences
  • Domestic market
  • Profitability

    and structure

  • Chart: Revenue Growth

  • Industry Outlook
  • International trade
  • Domestic consumption
  • Profitability
  • Table: Milk Powder Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Milk Powder Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Bread Production
  • Cake and Pastry Manufacturing
  • Biscuit Manufacturing
  • Chocolate and Confectionery Manufacturing
  • Dairy Produce Wholesaling
  • Catering Services
  • Supermarkets and Grocery Stores
  • Convenience Stores

  • Key Selling Industries
  • Dairy Cattle Farming

  • Products & Services
  • Skim milk powder
  • Whole milk powder
  • Buttermilk powder
  • Chart: Milk Powder Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Other Asian export markets
  • China
  • Supermarkets
  • Other export markets
  • Other domestic markets
  • Chart: Major Market Segmentation for the Milk Powder Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Milk Powder Manufacturing

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Milk Powder Manufacturing Industry

  • Industry Globalization
    Fonterra Co-operative Group Limited, Saputo Dairy Australia Pty Ltd, Bega Cheese Limited,
  • Table: Fonterra Co-operative Group Limited - financial performance
  • Table: Saputo Dairy Australia Pty Ltd - financial performance
  • Table: Bega Cheese Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Milk Powder Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Milk Powder Manufacturing Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Exports (2010-2024)
  • Imports (2010-2024)
  • Wages (2010-2024)
  • Wages (2010-2024)
  • Purchases (2010-2024)
  • Profit (2010-2024)
  • Depreciation (2010-2024)
  • Rent (2010-2024)
  • Utilities (2010-2024)
  • Other (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Global Dairy Trade
  • A global body that aims to facilitate trade of dairy products through its auction platform.
  • Skim Milk Powder
  • Milk powder with a low fat content, produced by removing cream from raw milk, then evaporating and drying the skim milk.
  • Whole Milk Powder
  • Milk powder produced by drying raw milk, including the cream. Whole milk powder has a higher fat content than skim milk powder.
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    Why buy this report?

    IBISWorld’s Milk Powder Manufacturing market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
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    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Milk Powder Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Milk Powder Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Milk Powder Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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