Population density soon to be bright spot for dairy industry

05-Feb-2016 - Last updated on 08-Feb-2016 at 09:56 GMT

The dairy market is on the right path, according to a professor from Emory University.

There’s a bright future for those in the dairy industry, according to a professor from the Goizueta Business School at Emory University.

Jeffrey Rosensweig, Director of the Global Perspectives Program at the school, told a group of dairy industry professionals at a breakfast session titled “The Global and U.S. Economic Forecast: Implications for the Dairy Industry” at the 2016 IDFA Dairy Forum that the food and diary industries have “a much brighter vision than most industries.”

“The world is adding 77m people a year; don’t listen to all the doomsday people about how the economy is slow,” he said. “Across the world wealth is being generated at higher [levels].”

China’s impact

While the stock market has taken a huge hit in 2016, Rosensweig said this has little to do with the US and a lot to do with China’s economy. However, he said there is a “lot of population density coming up right now,” specifically in China and India, where growth is hitting 6% to 7% each year.

“A lot of the future of exports of food products will be in this region,” he said, adding that as these countries become wealthier, processed and dairy foods will become more popular there.

Other top countries of growth where exports may become more successful include Indonesia, Turkey, Nigeria and Mexico. The entire world’s economy is growing, sans Brazil and Russia, he said, adding that he does not believe Russia will be a major player for the dairy processing industry in the near future, especially with its current ban on imports.

‘Fortunately, people have to eat’

The US dollar is gaining value, something that is making it very hard for the US to make a lot of money from exports. This also means imports are cheap for the US, according to Rosensweig. Even Canada has seen its dollar slip in value compared to US, as every US dollar is worth $0.72 Canadian. This all makes for a very volatile market, he said.

“Fortunately, people have to eat,” he said. “Your industry is not quite as volatile [as others]… When you talk about volatility, there’s always a business cycle. You’re not quite as subject to volatility, but of course you’re subject to it.”

While the US market has been subject to this volatility over the past decade, Rosensweig said the world adding so many people, many of which are moving into the lower-middle class, will be a boon for the dairy industry.

“Your future is bright,” he told the room full of dairy executives. “Don’t listen to people talking about the problems. Look at the fact that poverty in Latin America is half of what it was. The future is bright; we just have to get past the next few weeks, perhaps.”