This week stakeholders from across the dairy industry met in Puerto Varas, Chile to discuss the current state of the sector and share thoughts about its future. The 14th Pan-American Dairy Conference hosted by FEPALE (Federación Panamericana de Lechería) and Chile’s FEDELECHE (Federación Nacional de Productores de Leche) was attended by hundreds of dairy farmers, processors, suppliers, and other people relevant to the industry. Although the current low price environment imparted a solemnity to the meeting many of the presentations and participants focused on the strength of the industry and looked optimistically toward recovery.
The conference began on April 25, 2016 with a well attended opening that gave color to both the global and local dairy situation. Presentations by Tetrapak, the European Dairy Association, Rabobank, and the International Dairy Federation corroborated that the industry is currently in a state of oversupply, particularly considering the demand rationalization of major dairy importing countries, such as China. Most seemed hopeful that economic improvement in these developing countries would drive recovery in the coming months. On the supply side it seems unlikely that much will change – and in fact, production may even expand in Europe in response to quota removal. Andres Padilla from Rabobank shared that they expect recovery to occur but that it will be a slow process. According to their forecasts real improvement in dairy commodity prices will not be seen until 2017.
The opening session was capped by a presentation by the ex-president of Uruguay, José Mujica. His far reaching speech covered not only the need to ensure a robust and healthy dairy sector, but also the industry’s responsibility in terms of social and environmental sustainability. Ex-president Mujica was very well received and his presence was a highlight for many in attendance.
The second dairy of the conference included a number of both general and concurrent sessions. The day started out by giving several professionals an opportunity to talk about the social benefits of the dairy industry from both a nutritional and social perspective. Rodrigo Valenzuela from the University of Chile shared the Chilean story of how the government has used dairy products to combat malnutrition across the country. His evidence was startling and convincing, leading one to draw the conclusion that Chile’s relative economic strength in the region today can be traced back to a better nourished population. Following Señor Valenzuela’s presentation, a representative from Ecuador shared their experience with dairy in family farming systems and how the industry contributes to the economies of many low income communities.
Following the general presentations, conference attendees had the opportunity to split into three tracks, choosing from Primary Production, Dairy Processing, or Economy & Markets. Presentations included a review of the US dairy situation by Jaime Castenada of USDEC, a comparative look at Latin America’s dairy chain by Alejandro Galetto, and a review of the importance of the dairy sector to global food security by Pablo Valencia of the FAO. After the track sessions were completed attendees rejoined together for an emotional panel discussion delivered by three young dairy producers who are involved in their family farms. They spoke not only about their desire to work for their family businesses but also about the challenges that young dairymen face today.
Running concurrently to the sessions was a fair featuring over 30 commercial exhibitors promoting products and activities ranging from packaging and laboratory technologies to information services. The mood of the exhibition was lively with ample opportunity for interaction between conference goers and exhibitors. The exhibition ran both Tuesday and Wednesday.
Wednesday, April 27 began with a panel specifically dedicated to sustainability, a theme which appeared repeatedly throughout the conference. Though clearly the industry still has more to work to do, it is clear that many producers and processors have taken meaningful steps to offset their environmental footprint. General opinion is that more work remains to be done regarding the marketing of these actions so that the public becomes aware of the industry’s advances.
Following another couple of split sessions, the group once again gathered together to see two case studies of production systems in different South American countries. First, Bruno Campos de Carvalho from Embrapa in Brazil presented the extensive pasture based system that is popular throughout most of the country. He shared genetic particularities of Brazilian dairy cattle that make them able to thrive in the tropical climate that covers most of the country. On the opposite end of the spectrum, Cristian Chiavassa, an Argentine dairy producer with one of the only freestall operations in the country, shared his family’s experience using compost bedding and how it has contributed to improvements in production as well as animal welfare.
The day’s sessions ended with a review of Chile’s orientation to international dairy trade. Andres Rebolledo from the Chilean Ministry of Foreign Relations espoused Chile’s propensity for free trade and showed how Chile has evolved over the years from being a net dairy importer, to a net dairy exporter, and again to become a net dairy importer in 2015. The final session was an inspirational presentation given by Jorge Pacheco who shared his entrepreneurial journey. The evening ended with a gala dinner where all were invited to eat, drink, and dance the night away in true Latin style.
In addition to the formal meetings those who were interested could choose to participate in technical visits on Thursday and Friday. On Thursday we visited a 300 cow jersey dairy in Osorno, Chile which boasts the first robotic milker installed in the country. The dairy has four robots and a series of automatic gates which control cattle flows and pasture rotation without the need for any human interaction. Not only was it exciting to see such sophisticated technology on a Chilean dairy but the resulting low levels of cattle stress from not being moved regularly was extraordinary. Following the dairy, the visit took us to the cheese plant of cooperative COLUN. The plant has a capacity to process 750 million liters of milk per day into a wide variety of semi hard and hard cheeses. Built in 2012 the factory was exceptionally modern and featured several state of the art automatic systems that limit human interaction and the possible introduction of contaminants into the production process. The plant employs 50 people over 2 shifts.
The last day the technical visits took us to two farms managed by father and son that use a breed of cattle called the ‘Overo Colorado’. Overo refers to the spotted coat pattern while Colorado refers to their red coloring. The breed is a descendant of the European breeds brought to the region by German immigrants and is particularly well suited to the cool climate in the south of Chile. The dairies have a strong New Zealand influence and milk nearly 300 cows in total.
All in all, the conference was an excellent opportunity to connect with other dairy industry experts and learn more about the sector, especially in Chile. Although it is clear that the current low prices are negatively affecting all parts of the industry the resilience with which I saw the industry looking to the future was inspiring. Recovery may be slow to come but when it does, the Latin America dairy industry is poised to serve the world.
* * *
The Panamerican Dairy Congress is held biannually in a rotating location. The next Congress will take place in 2018 in Argentina. For more information, see http://fepale.org/