The country’s dairy imports this year could fall by 5 percent to 2.8 million metric tons liquid milk equivalent (MMT-LME) from last year’s record-high of nearly 3 MMT-LME due to dampened consumer demand, a Global Agricultural Information Network (GAIN) report said.
“Total imports in 2020 are projected to drop due to dampened consumer demand caused by the Covid-19 induced economic slowdown,” the GAIN report, prepared by the United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS), said.
“Dairy imports in 2021 will likely increase marginally as the local economy recovers and purchasing power improves,” it added.
The report noted that liquid milk imports this year have dropped as the use of the commodity in the food service sector, particularly coffee shops, has declined during the pandemic.
“Similarly, imports of butter and other dairy spreads as well as cheese, mainly coming from New Zealand and Australia due to the duty-free advantage of those suppliers, are also seen to drop due to the economic slowdown and reduced food service operations,” it added.
The Philippines imports virtually all of its dairy products, especially milk powder, as domestic production cannot meet the country’s dairy demand of nearly 3 MMT-LME, according to the report.
For this year, local milk production is projected to reach a record-high of 26,000 MT and will likely hit 26,500 MT next year, based on the USDA-FAS Manila estimates.
Local milk output last year reached 24,380 MT, 2.9 percent higher than the 23,690 MT recorded in 2018.
The GAIN report said local milk production is increasing due to “growing local dairying capabilities and the implementation of new dairy development projects.”
Bulk or about 65 percent of the country’s total milk output is cow’s milk, while the rest is carabao’s milk (31 percent) and goat milk (4 percent), according to the report.
“The average Philippine milk production per animal [8 liters/day] remains low mainly due to poor feed and management practices, compounded with high production costs and a lack of adequate dairy infrastructure,” it said.
“In comparison, the average daily milk yield in the United States is around 30 liters/day and about 20 liters/day in the United Kingdom,” it added.
The country’s annual per-capita milk consumption is estimated at 22 kilograms, which is lower than Thailand’s 26 kilograms, Malaysia’s 52 kilograms and the United States’s 287 kilograms, according to the report.
“With a growing population of roughly 107 million in 2020, the Philippines is a large and expanding market for milk and dairy products,” it said.
“Other factors contributing to the long-term trend of strong growth in dairy consumption are expanding cold chain capacity, an increasing number of supermarkets, and a blossoming food processing industry,” it added.