Dairy Industry in Danger
Anna Sophia Gross of The Guardian reported on 28 November that one in six pints of milk produced around the world is lost or wasted, according to research conducted at Edinburgh University for the Guardian.
Sixteen percent of dairy products – 116m tonnes – is lost or discarded globally each year, according to Prof Peter Alexander, a member of the newly formed Global Academy of Agriculture and Food Security. He calculated that retailers, distributors and consumers are responsible for half of this waste, throwing away roughly 60m tonnes of dairy a year.
About 55m tonnes are lost before they even reach a store – during production and distribution – due to spoilage and waste at the farm, or while the milk is being distributed and exported abroad.
However, some analysts believe dairy waste figures could be as high as 30% if further inefficiencies such as flooding foreign markets, using milk as animal feed and overconsumption, are taken into account.
“To achieve a more efficient system, and reduce the environmental impacts from our food production, we need to consider ways to reduce all these sources of loss,” said Alexander.
In many developing countries, the percentage of milk lost from farm to store is much higher than in more economically developed countries, due to difficulties in storing and transporting products. For example, 15% of Oman’s milk is lost at the farm level, compared with 0% in Sweden, according to the UN’s Food and Agriculture Organisation (FAO).
In more developed countries, such as the UK, milk and dairy tend to get thrown away at the retailer and consumer level. According to Wrap, the UK government’s waste reduction body, a fifth of all food waste in the UK is dairy.
Despite this, dairy production has been growing rapidly around the world over the past four years, rising by 6% between 2014 and 2018, according to the US Department of Agriculture (USDA). The biggest production increases were seen in India, Canada, the Netherlands and Ireland.
Europe significantly increased its production of milk in 2015 when the European milk quota was lifted, which had limited the amount farmers could produce.
Farmers across Europe rushed to increase their output to maximise profits at the same time demand for dairy fell in Asia, particularly in China and Russia. European dairy markets flooded, causing what some have called a “milk price crisis”.
“You can tell when there’s a surplus because prices go down,” said Kevin Bellamy, dairy head of F&A Sector Banking, the biggest dairy bank in the world.
In the EU, milk prices fell from an average of 37 cents per kg in 2014 to 28 cents in 2018, according to the European Milk Board (EMB). World milk prices did recover somewhat in 2016, though not to pre-2014 levels.
The EMB estimates that major production increases in this period led to a surplus of 11m tonnes on the world market.
The European commission has taken some action to temper the effects of market liberalisation. Since July 2015, it has bought around 380,000 tonnes of skimmed milk powder from overproduction into public storage – known as a demand intervention scheme. The European commission is now trying to sell this powder, but as supply increases, prices fall.
The majority of dairy farms in Europe are small-scale family-run businesses and any reduction in production means a loss of family income. Low milk prices have had little effect on levels of output as farmers continue to produce more milk to prop up their cash flow.
Dairy UK, the UK trade association for the British dairy supply chain, noted that dairy is globally one of the least wasteful food groups. About a third of all food that is produced each year is wasted, compared with the dairy industry’s 16%.
With more milk than can be consumed on home soil, European farmers and farming associations have been exporting their dairy products, particularly milk powder, to the developing world.
This powder is now sold at “dumping prices” in Africa, in direct competition with local producers. Since 2009, skimmed milk powder exports have increased three-fold according to a study published by Oxfam and SOS Faim, and the market is forecast to grow by 4% next year.
In Burkina Faso, the average shop price for a litre of locally produced milk is 600 CFA (80p) whereas milk produced from imported powder costs only 225 CFA (30p).
Bocar Diaw, president of the Senegalese national federation of local milk producers (Fenafils), expressed his concern about this surge in European exports, telling a delegation of EU policymakers last year: “Overproduction must be regulated within the European Union – stop relocating your problems to West Africa.”
Western law makers seem unperturbed however, and are altering regulatory systems in the EU and US to make it easier to export dairy around the world.
“We need to adapt supply and demand in order to avoid damaging overproduction, which always results in lower milk prices and a heavy financial burden for dairy farmers around the world,” said Silvia Däberitz, managing director of the European Milk Board.
Around 82m tonnes (11%) of milk is used as animal feed globally. It’s viewed as a form of wasteful inefficiency by some analysts, as cow milk contains less energy and protein than livestock feeds. Alexander attributes 67m tonnes of waste to this use.
He calculates that a further 53m tonnes of milk wasted each year globally is due to overconsumption, or the general public consuming about 10% more than they actually need. “This overconsumption could be argued to be more damaging to society than discarded food waste due to a combination of both environmental and health costs,” he said.
Dairy UK contests these calculations, stating that animal feed should not be considered waste, and that “‘overconsumed milk is clearly neither a source of food loss or waste given the nutritional benefits of milk, which provides an array of valuable nutrients.”
Wrap suggests a number of things that consumers can do to curtail waste. The most important is keeping fridges cooler. They estimate that reducing the temperature of our fridges to below 5°C could stop more than 50,000 tonnes of milk waste every year in the UK, saving shoppers £25m. Other recommendations include promoting the freezing of milk, and introducing longer shelf lives.