IFCN Dairy Research Center

Project Proposal
Dairy Farm Economics in
Shuangcheng, China
Introduction
Proposal 1: Fast start + first results
Proposal 2: IFCN farm comparison
Proposal 3: Future farm types
Annex: What is IFCN?

Dr. Torsten Hemme

Torsten.Hemme@ifcndairy.org
11th October 2007

Project Proposal
International Competitiveness
of Milk Production via the
IFCN Network

What is IFCN?
Who benefits?
Two levels of participation
Consortium benefits

Dr. Torsten Hemme

Torsten.Hemme@ifcndairy.org
March 2010
For a better understanding of milk production

What is IFCN ?
IFCN stands for International Farm Comparison Network and is a scientific association
between farm economists and the related advisors and farmers. The IFCN network concept
is so far globally implemented and established for the product milk.
The IFCN Dairy Report is produced annually since the year 2000. It gives an overview about
the milk production world-wide and summarises the results of the IFCN research activities.
In 2009 dairy researcher from over 70 countries have participated. (www.ifcndairy.org).

Why is the IFCN dairy network useful?
Milk production world-wide is
characterised by three key issues which
will lead to rapid changes in the future:
- Very diverse farming systems
- High dependency on politics
- Scope for substantial change in policy
and increasing volatility in dairy prices.
Know-how becomes an important
»production factor« for successful
business decisions for farmers and the
related agribusiness. Moreover policy
discussions can become more fact-based
which makes solutions easier to find.
What is the mission of the IFCN Dairy?
To create a better understanding of milk
production world-wide.
What are the annual activities?
• Create a harmonised database of farms.
• Analyse the farms using one method.
• Validate results at the Dairy Conference.
• Publish the results in the Dairy Report.
• Improve the IFCN methods continuously.
• Exchange ideas on current dairy issues
and research projects.
What are the values of the IFCN?
IFCN is an open scientific system for the
exchange of ideas and the creation of
knowledge and information. IFCN is
independent from third parties (policy
makers, lobby groups, industry) and
committed to truth, science and reliable
results.
What are the priorities?
1. Sustainability of the network
2. Reliability of data & quality of results.
3. Inclusion of more countries and farms.
4. In-depth analysis on special issues.
5. Special studies (policy analysis, etc.).
How is the IFCN Dairy organised?
The IFCN Dairy Research Center
coordinates the scientific work. Moreover it
provides a professional management for the
network.
How are the IFCN Dairy activities funded?
The network co-ordination is mainly funded
by the consortium fee from the participating
countries, partnerships with agribusiness
and global agriculture-related institutions. All
For a better understanding of milk production
partners have agreed on the priorities
and values of IFCN.

Who benefits from a IFCN participation?

1. Benefits for the dairy sector of the country in general
The dairy sector of each country is facing competition from two sides: a) from the dairy
sectors of other countries and b) from other agricultural sectors within the country. To
have a prospering dairy sector a clear strategy of all stakeholders is required.

The participation in IFCN provides information about the global developments of the
dairy sector and the competitive position of your country in it. Moreover it identifies
potential points for improvement and the helps in setting priorities in allocation research
budgets.

2. Benefits for dairy farmers

/ producer organisations
Dairy farmers benefit from knowing
their competitiveness in a globalised
dairy world. Moreover strengths and
weaknesses of the own country
become visible. Finally they get
access to knowledge about production
systems and methods that might
improve their farming systems.

3. Benefits for milk

processors
For milk processors the milk price
paid to the dairy farm counts for about
70% of the cost component to
produce a dairy product. The
knowledge about the production costs
of the milk district in relation to other
milk regions is a key element of the
competitiveness of the milk processor.

4. Benefits for policy

makers - The government
The government is influencing the
dairy sector with various policies. The
participation in the IFCN consortium
provides the policy makers with facts
and figures for political discussions.
Moreover the researcher gets via his
participation in IFCN a wide set of
methods and models to analyse the
impact of policy changes on the dairy
farm or the dairy sector.
For a better understanding of milk production
–
Example: Cost of milk production
Cost from profit & loss account - non-milk returns Opportunity costs Quota costs

Countries: Western Europe CEEC + IL America N+S Asia Oceania

58
56
54
52
50
48
46
44
42
40
38
US-$ / 100 kg ECM

36
34
32
30
28
30$
26
24
22
20 18$
18
16
14
12
10
8
6
4 10$
2
0

PK-1
AT-12
AT-35

NL-51

FR-31
AT-22

IE-47

PL-3

CA-96

AR-350
DE-35

BE-45
BE-80

IE-93

PL-20

IL-56

CA-56

AR-150
AR-1400

IN-2
IN-4

PK-3
PK-10U
DE-80
DE-650

ES-44

SE-50
SE-160
FI-20
FI-40
NO-19
NO-30
EE-35

PL-180
CZ-67

IN-37

BD-2

AU-207VI
US-2100ID

PK-10R

AU-184WA
AU-231WA
CH-26
CH-33
CH-70

NL-90

FR-70

ES-199

DK-150

EE-400

CZ-428
CZ-535
HU-100
HU-400

IL-300

US-135WI
US-700WI

BR-80

IN-22

BD-10

CN-108
CN-612

AU-250VI
AU-915VI

NZ-239
NZ-447
NZ-835
AU-518WA
DK-80

BR-30

BD-25
CH AT DE NL BE FR ES IE DK SE FI NO EE PL CZ HU IL CA US AR BR IN PK BD CN AU NZ

5. Benefits for research

organisation / the
researcher
The research organisation improves
its access to methods, models and
data which strengthen its capacity in
dairy research and teaching.
Moreover the international linkages
provide recognition and also the
possibility to attract additional
research funds. Finally the partnership
with IFCN facilitates and strengthens
the links with the local dairy sector
and capacity to serve the needs in a
more globalised world.
 IFCN Dairy offers two levels to participate
A. Associated partner (Country page partner) Foreseen for 2- 3 years.
This status is seen as a starting level to help research organisations to join the network and
get results quickly. Moreover it assists to become a consortium member of IFCN.

Input Output
Sending milk & feed price data (1996–2006) Being part of the IFCN Dairy Network
Sending data for the country page A publication in the IFCN Dairy Report
Validating the country page results Getting 2 copies of the IFCN Dairy Report
Time input: 1 day / year
Travel cost: not required
Membership fee: no fee

B. Consortium membership - Long term partnership

The consortium membership offers the participating researcher full access to the network
and its knowledge. This provides a country a perfect overview about its position in the global
dairy industry. Moreover the participating researcher has the capacity to support all
stakeholders in the country in strategic discussions of the dairy business and dairy policy
design.
Additional input compare to A. Additional output compare to A.
Provide data of two typical dairy farms of Annual benchmarking of your dairy
your country in the IFCN format farms / your country world wide
Travel budget to the IFCN Dairy Dairy Reports: 18 copies to distribute
Conference (Flight + hotel costs) within your country
IFCN membership fee which covers the International networking to the leading
organisation of the network, the annual network in your research area.
conference,. etc
Join the IFCN Dairy Conference, with 50
researchers from 40-50 countries
Capacity building: Participate in the
IFCN method training at the conference
Access to data: Get the IFCN result
database for teaching & research
Access to Methods + Models: Get the
IFCN model TIPI-CAL (open source version)
Recognition of your institute via Co-
Authorship of the IFCN Dairy Report.
Time input: 10 day / year Others (for details see Annex 1)
Travel cost: local + international Steering group
Membership fee: please ask for details E-mail hotline
In the first year the input can be higher due Marketing support
to learning the IFCN method and tools.
* Technical conditions: Delivering data in reasonable quality and in time. In case the data
availability is limited, both parties can develop a modified solution for the country page.
IFCN

Background information on the Consortium

Examples of funding the IFCN consortium participation:

a) Out of a research projects
b) Via government funds
c) Via funds from unions of dairy farmers or milk processors
d) The IFCN Dairy Research Center has a lot of experience how the stakeholders
of other countries have found solutions. Please discuss your ideas with us.

The Benefits form the IFCN Dairy Consortium membership

• Participation in the IFCN steering group: Join this group to discuss the further
developments of IFCN during the IFCN conference.

• Global benchmarking: Analysis of your dairy farms each year.

• Dairy Report: Each IFCN Partner receives 20 copies of the annual Dairy Report for free.

• Scientific publication: The IFCN Partner will be named as co-author of the Dairy
Report and author of the country pages.

• Dairy Conference: The IFCN Partner has the right to participate in the annual exclusive
IFCN Dairy Conference to discuss the results of the annual farm comparison, one
special topic chosen and new and up to date dairy studies/topics.
The conference fee, all common meals and excursions are covered by IFCN Dairy
Research Center for one person per institution. If an IFCN Partner intends to send more
than one person per institution, the IFCN Center should be contacted in advance for
participation possibilities and the related costs.

• Data base: Each IFCN Partner gets the result database for all IFCN countries
participating in the Dairy Report. As well he can get the full database for a selection of
countries or regions that are interesting for him.

• Model TIPI-CAL and support tools: Each IFCN Partner is granted the right to use this
farm level benchmarking and 10 year simulation model. Before every the IFCN
conference a model training / model workshop will take place. Moreover, in the training
IFCN Center will provide each IFCN Partner with all other tools that are available (ppt
presentations, excel tools, currency/language converter, etc)

• Marketing support: Assistance from the IFCN Center in creating products for dairy
related companies/institutions in your country.

• E-mail hotline: Possibility to get answers to your specific questions.

Please note that some of the mentioned benefits depend on the IFCN Partner’s participation
in the annual working schedule and the annual IFCN dairy conference.