In or products based on it. So, nowadays the

In m? essa? I ?m tr?ing to ?n?lyze the main concepts
and the main business principles of the milk and dairy products trading.

History of milk and dairy
products trading

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The history of the dairy industry began with the
domestication of animals giving milk. Pr?cessing of milk for butter, cheese, and sour milk
drinks first appeared in the southern regions of Russia. The first commercial dairy product in the history of
the dairy industry was butter. In 1575 and in 1610 cow butter was listed in the
“Trade Book” of the Russian merchant class as a commodity for export.
By the end of the seventeenth century oil trade had been developed so much that
Peter I, who was looking for sources of income for the state, drew attention to
this fishery. At the beginning of the XVIII century by decree of Peter I began
to import cattle from Holland. At the end of the XVIII century, in large farms
were created dairies with the production for the market of not only cheeses,
but also melted butter, sour cream and cottage cheese. In the twentieth
century, the dairy-canning industry was created, the industrial production of
ice cream, processed cheese was mastered.

The First World War and the Civil War led to a sharp
decline in the production of dairy products and hampered the history of the
dairy industry. In the post-war period, the restoration and further development
of all sectors of the national economy began, including the revival of the
history of the dairy industry. In connection with the reconstruction, which
began in the 1930s, dairies started the construction of new plants. Depending
on the geographical, climatic and national characteristics, mankind created a
huge number of food products, including milk or products based on it. So,
nowadays the production of dairy products remains one of the most developing
sectors of the world.

The industry developed most rapidly in Asia, as well
as in Australia and New Zealand. Thus, in the 2003-2004 agricultural season,
New Zealand, milk received 5% more than in 2002. The situation was somewhat
worse in Australia, where hot weather in some parts of the country prevented
the dairy industry from recovering after a very arid year. But, nevertheless,
the growth rates were 1-2%. In specific figures, milk production in Australia
was 10.6 million tonnes, and in New Zealand – 15 million tonnes. In the dairy
industry of the two countries, the herd expanded. In Australia, however, it
should rather be called the restoration of the previous livestock after a
catastrophic drought in 2002, when Australian farmers had to slaughter
livestock. Australia and New Zealand produced only 4% of the world’s milk, but
their share in the export of dairy products was 35%. In 2004, the United States
produced 77.5 million tons of milk. The main growth factors are an increase in
milk yield and cyclical renewal of the herd. True, in the second half of the
year the US introduced a system to stimulate the growth of milk prices while
reducing production. The policy of containment of milk production was also conducted
in Canada, Japan and the EU countries.

Eastern Europe. In most countries, the volume of
production did not increase due to the drought in 2003. The milk increased in
relation to the cow, but the number of livestock decreased. The early accession
of some countries of the region to the EU forced some of them (for example,
Poland and Hungary) to pay serious attention to improving the quality of
products in order to meet the high standards of Western Europe. In Bulgaria and
Romania, with the financial support of governments, mechanisms were created to
promote the growth of product quality. Moreover, in Bulgaria it was announced
the closure of farms and enterprises for the production of dairy products that
do not comply with EU standards.

Russia. In general, the number of dairy herds
decreased, but due to an improvement in the situation with feed, the milk
yields became higher. While in previous years the main production base of the
industry was large state farms, now these are smaller economic units.

 In India milk
was received in 2003-2004. (April / March) more than 90 million tons. Because
of monsoon feeds in India is enough. In general, in this country, the growth in
milk production and milk production is explained by an improvement in the
forage base and genetics of animals.

In China, due to rising prices in world markets, the
supply of milk to the population was due to own reserves, in part because of
the increase in the number of herds. In China over the past few years, demand
and supply have grown by 20%, and annually.

In Latin America, due to low prices, has been made no
serious progress in the dairy sector. An exception can be considered some
countries of Central America. The export of primary products requiring
subsidies is limited by agreements reached during the Uruguay Round of
negotiations.

World consumption of milk and
dairy products nowadays

World consumption of milk and dairy products,
excluding soy drinks and milk substitutes, increased by almost 2% to the level
of the previous year and amounted to 580 million liters. This is stated in the
data of the marketing research of the world market of milk and dairy products,
conducted by GLOBAL REACH CONSULTING on the basis of data of the US Agriculture
Ministry (USDA). Over the next decade, global consumption of dairy products,
including milk, cheese and butter, is expected to grow by 20%. By 2025, the
figure should reach 710 million tons (in terms of liquid milk), experts say.
Leaders for the consumption of milk and dairy products at the moment are the EU
countries, which account for more than 26% of the world consumption structure.
Then comes India and the United States. Experts note that consumption of dairy
products in developing countries is growing more actively. Leaders in terms of
growth rates of consumption among developing countries are India, Pakistan and
China. The study showed that the average milk consumption and milk production
per capita in the world in the dairy equivalent amounted to almost 110 kg by
the end of 2015. In developed countries, per capita consumption is about 223 kg,
in developing countries it is almost 3 times less. The demand for convenient
and healthy dairy products is growing, especially among young consumers.

Milk production

Total milk production in the world in 2015 amounted to
808.7 million tons. FAO estimated that in 2016 milk production in the world  grew to 817 million tons by increasing
production in Asia in North and Central America, while in the ocean and South
America, the decline in production of a decade-long disinvestment were result
in an increase in the volume of production Nori by 20% to 960, the total volume
of world trade in dairy products in 2016 was compiled at 72 1 tons.

The main export items are dry whole milk, the volume
of world trade which amounted to 2.6 million tons as of 2016. Cheese 2.3
million tons and dry skim milk 2.2 million tons. Butter is 0.9 mln tons.

Export from Australia and Switzerland will continue at
last year’s level. As of 2016, the world’s largest producer of dairy products
was the EU, with a production volume of 163 million tons. At the same time, the
projected growth rates of milk production in the EU are relatively small less
than 1 per year. Higher dynamics of growth to 3-3.5% is expected in such large
countries producing milk, such as India and Pakistan. As a consequence, by
2025, it is predicted that India will change its leader in the global market
with a milk production of 207 million tons. For comparison, the expected volume
of milk production in the EU is 179 million tons. According to the FAO forecast,
Russia will retain the world’s 7th milk production in the 10-year period,
increasing it by 1 million tons to 31 million tons.

More than 6 billion people in the world are consumers
of milk or dairy products and more than 750 million people live at the expense
of dairy farms. Cow’s milk accounts for more than 85% of the world’s
milk production structure. The largest amount of cow’s milk is produced in the
US (91.3 million tons), while the top 50 countries meet the needs of about 90%
of the world market. New Zealand, the EU, Australia and the United States are
the largest milk exporters, while China and Russia until recently were the
largest importers.