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Cooperation andCooperation and solutions in agriculturesolutions in agriculture
20092009
The Hungarian milk The Hungarian milk market and the Global market and the Global
economic crises economic crises
General Introduction to General Introduction to the Hungarian milk marketthe Hungarian milk market
Animal Stock Animal Stock
Animal StockAnimal Stock
0
100
200
300
400
500
600
700
800
2004 2005 2006 2007 2008
SzarvasmarhaTehénTejhasznú tehén
General Introduction to the General Introduction to the Hungarian milk marketHungarian milk market
Animal StockAnimal Stock
Number of SitesNumber of Sites
Number of SitesNumber of Sites
Year
Keeping Cattle Out of this : Keeping Cow
Number of cattle/farm
Agricultural
Company Farmer
Agricultural
CompanyFarmer
Agricultural
CompanyFarmer
2005 847 24 261 764 17 570 560 9,6
2006 906 19 170 804 14 808 531 11,5
2007 898 18 908 799 13 260 540 11,6
2008 870 18 206 780 13 433 545 12,5
General Introduction to the General Introduction to the Hungarian milk marketHungarian milk market
Animal StockAnimal Stock
Number of SitesNumber of Sites
Milk quotesMilk quotes
Milk quotMilk quoteses
1880,00
1900,00
1920,00
1940,00
1960,00
1980,00
2000,00
2020,00
2040,00
2060,00
2004 2005 2006 2007 2008 2009
Tejkvóta Magyarország tonna
General Introduction to the General Introduction to the Hungarian milk marketHungarian milk market
Animal StockAnimal Stock
Number of SitesNumber of Sites
Milk quotaMilk quota
Milk production Milk production
Milk production (million liters)Milk production (million liters)
1740
1760
1780
1800
1820
1840
1860
1880
1900
2004 2005 2006 2007 2008
tejtermelés/tehén/liter 6693
tejtermelés/tehén/liter6781
General Introduction to the General Introduction to the Hungarian milk marketHungarian milk market
Animal StockAnimal Stock
Number of SitesNumber of Sites
Milk quotaMilk quota
Milk productionMilk production
Raw milk buy-outRaw milk buy-out
Average prices of raw milk buy-outAverage prices of raw milk buy-out
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
80,00
90,00
2004 2005 2006 2007 2008 2009 1-3hó
2004
2005
2006
2007
2008
2009 1-3hó
zsír 3,63fehérje 3,23
zsír 3,66fehérje 3,24
zsír 3,75fehérje 3,33
The number of Milk ProcessorThe number of Milk Processorss in in Hungary Hungary
60
65
70
75
80
85
2004 2005 2006 2007 2008
Tejfeldolgozók számaMagyarországon
Concentration among the processors
Top 5 Top 5 in Hungary in Hungary ((net revenuesnet revenues))
Net revenues 2006 (thousand HUF)
Tolnatej 14 354 738
Bongrain 21 675 014
Danone 26 596 844
Friesland 44 199 820
Sole-Mizo 50 977 277
New participants New participants ––new rolesnew roles
Alföldi Tej Alföldi Tej enters the marketenters the market
InternationalInternational Companies Companies are overshadowed are overshadowed
Challenges that milk Challenges that milk processors are facing processors are facing
I.I. Market ChallengesMarket Challenges a)a) Decrease in DemandDecrease in Demand
the global economic crises affects Hungary more the global economic crises affects Hungary more seriously seriously
because of thebecause of the high state debthigh state debt high budget deficit high budget deficit
llaack of anti-cyclic ck of anti-cyclic economic policy economic policy
ØØ state spending state spending øø tax decreasetax decrease øø interest rate decreaseinterest rate decrease
History of Milk Product SalesHistory of Milk Product Sales (2008)(2008)
Forrás: GfK Hungária, Consumer Tracking
Challenges that milk Challenges that milk processors processors are are facfacinging
b)b) Import Import PressurePressure high import ratiohigh import ratio
unsettled European market unsettled European market InternationalInternational chains chains with Eastern and Central European markets with Eastern and Central European markets secure their home industry’s support secure their home industry’s support
Overproduction because of weakened quota regulationsOverproduction because of weakened quota regulations meetsmeets decreased demand decreased demand Low efficiency of market regulation toolsLow efficiency of market regulation tools
In some product categories 40-50%
In some product categories 40-50%
MMarket share arket share of dof domestic and importedomestic and imported milk milk (UHT)(UHT)
Weaker HUF
Collective measures in quality controlfor domestic and imported goods
Forrás: GfK Hungária, Consumer Tracking
2. wholesale
1. hypermarkets
Challenges that milk Challenges that milk processorsprocessors are are fac facinging
c) c) Strong ChainsStrong Chains
3. supermarkets9 9 94
2 2 24
15 15 14
7
15 14 14
13
3 3 3
1
17 18 18
22
15 15 17
22
24 25 23 27
2006 2007 2008 … 2013
Hypermarket
Supermarket
Wholesale
Cash&carry
Small shop chains
Independentshops
Grocery
Else
Forrás: GfK Consumer Tracking, és GfK szakértői becslés 2013.
Plus supermarkets!
Ethical CodexEthical Codex Adaptation Adaptation Concentration Concentration
- - priceprice
- - flexibility flexibility
- - supplysupply
Milk Processor Concentration Milk Processor Concentration ((revenuerevenue))
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2004 2005 2006 2007 2008
Top 3Top 5Top 10
II. II. ProblemsProblems of of FinancingFinancing
Changed bank credit Changed bank credit policypolicy
Increasing costs of Increasing costs of
interests interests On base of HUF and On base of HUF and
foreign currency as wellforeign currency as well ((companies’ losscompanies’ loss of of ~~20% 20% on on
foreign currency creditsforeign currency credits))- Hungary’s Hungary’s position position hashas
weakened internationally weakened internationally
increased financial increased financial imposition in export trade imposition in export trade
HDB’s credit guarantee program could help
HDB’s credit guarantee program could help
III. III. Problems Problems of Tenderingof Tendering
SSlowlow, , prefers producers to prefers producers to processors processors
Without competitive Without competitive FOOD FOOD INDUSTRY there is no competitive INDUSTRY there is no competitive
AGRICULTURE AGRICULTURE
High raw milk export ratioHigh raw milk export ratio
The landownership is not solved The landownership is not solved
Investment has stopped because of lInvestment has stopped because of laack of financingck of financing
This years dry weather is making producers situation This years dry weather is making producers situation even even worseworse
IV. IV. Possible damage of the Possible damage of the producers’ base due to low producers’ base due to low
priceprice
V. V. Increase in the number of Increase in the number of partners who do not pay partners who do not pay
General General lack of lack of trust trust because of because of mutualmutual debts debts
! ! LegislacyLegislacy needs to needs to be changed be changed
debt
debt
debt
V.V. Prospects in the next few Prospects in the next few years years
SWOTSWOT analysis analysisStrengths
Efficient, selected cattle
Appropriate forage base
High percentage of industrial milk
producers Improving milking
Relatively cheap labour Quick adaptation
Weaknesses
Lack of capital
Low cooperation skills
Low profitability
Many small businesses in the processing
Low rate of specialization
Low support in comparison to Western Europe
Deficient marketing
Low lobbyist skills
Deficient trade negotiation position
SWOT SWOT analysis analysis
Opportunities
Growing global market
Vantage point due to close Western and Eastern European markets
Positive changes in the consumer preferences in medium term
Expected growth in the domestic consumption
Concentration
Increased public and individual marketing
Thinking together, increasing organization and lobbying
Threats
Decreasing population Worsening solvency Currency rate fluctuation, high tax and interest ratesFinancing difficulties Increasing energy costsIncreasing environmental costs Low scale of investment and innovationLow economic growth Low utilization of capacities in processing Declining production Increasing importMilk’s weak competitive position in comparison to other drinks Concentrating retail trade
Kereskedelmi márkák térhódítása
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