Dairy prices skyrocketed to near-historic highs in 2007
Los Angeles, CA (PRWEB) July 16, 2012
The Global Cheese Manufacturing industry has evolved into one of the most dynamic food industries in the world. Cheese consumption has grown at a rapid rate, making it one of the world's largest traded agricultural commodities. "The industry has benefited from robust global economic growth for much of the past five years, rising demand from the newly affluent economies of Southeast Asia and Latin America and clever product innovation," says IBISWorld industry analyst Naren Sivasailam. "This has been combined with falling supplies from dairy powerhouses such as New Zealand and Australia due to adverse climatic conditions and high feed costs." Consequently, dairy prices skyrocketed to near-historic highs in 2007, resulting in dramatic increases in revenue at the expense of industry profitability. This trend was reversed with onset the global economic crisis in late 2008, characterized by sluggish demand conditions and a build-up of unused inventory. In the five years through 2012, industry revenue is estimated to decrease by 8.0% per year to total $55.3 billion.
The United States is the world's single largest cheese producer. Europe as a whole accounts for the largest share of revenue and production, largely due to its historical association with cheese making and the level to which cheese is ingrained into its culture. According to Sivasailam, "Germany, France and Italy are the most dominant producers in the region, with a host of specialty cheeses that command a premium around the world." In the developing markets of India and China, cheese consumption has grown at a mid- to high double-digit rate due to increased urbanization, westernized diets and rising incomes. The Global Cheese Manufacturing industry is characterized by a diverse range of participants, ranging from multinational behemoths such as Kraft Foods Inc. and Fonterra to smaller dairy cooperatives and niche and artisanal producers. In the developed markets of Europe, North America and Australia, cheese production is largely a mature and saturated industry with limited growth opportunities for domestic manufacturers. The European market, for example, is highly fragmented with many small producers servicing niche domestic markets. In North America and Australia, the market is more concentrated with large multinationals and dairy cooperatives that produce the majority of the domestic cheese.
Over the next five years, industry prospects are expected to be relatively bright. This will largely be driven by the forecast economic recovery, stability in dairy product prices and a resurgence in demand from the developing world. Product innovation in the form of functional and health-based cheese products is expected to generate renewed interest in the mature markets of North America, Oceania and the European Union. In addition, the industry needs to be wary of environmental and regulatory constraints imposed by various domestic and international agencies, especially with regard to import tariffs and sustainability. For more information, visit IBISWorld’s Global Cheese Manufacturing industry report page.
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IBISWorld industry Report Key Topics
This industry consists of establishments primarily engaged in the manufacturing of fresh and processed cheese and curd. The final product is subsequently sold to dairy wholesalers, supermarkets and the foodservice industry.
Executive Summary Key External Drivers Current Performance Industry Outlook Industry Life Cycle
Products & Markets
Supply Chain Products & Services Major Markets
Globalization & Trade
Business Locations Competitive Landscape Market Share Concentration Key Success Factors Cost Structure Benchmarks Barriers to Entry
Industry Data Annual Change Key Ratios
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