A SCARE THAT PROMPTS OPPORTUNITIES

The Philippine Star
10/10/08

The melamine catastrophe just might be the crisis necessary to draw attention to our local dairy producers. For years on end, the call of small milk producers for more sustained government support had fallen on deaf ears. Hopefully, the tainted milk scare will yield positive results for a long neglected sector.

Despite being a predominantly agricultural country, the Philippines sadly produces only one percent of its dairy consumption and spends annually mainly on importations at least half a billion dollars worth of milk and dairy products.

One can just imagine the huge potential of the local dairy industry. With a population nearing the 90 million mark, and growing annually at 2.36 percent, there is a large market for milk and milk products.

Our dairy industry, which buys 99 percent of its inputs from abroad, is estimated to generate sales of up to $1 billion annually. We are the largest Southeast Asian market for US dairy products, mainly nonfat dry milk powder, whey and cheese. The major suppliers of fresh milk are Australia and New Zealand.

On the other hand, the National Dairy Authority estimates local dairy requirements to expand by 2 percent yearly, actually rather tepid although improving. Are we not drinking enough milk? Or, not enough can afford to have the luxury of this drink?

Untapped demand

Aside from the melamine scare, there are other reasons why our policymakers at the Department of Agriculture should give the industry due attention.

Current trends show a growing preference for liquid milk, with milk imports trebling in recent years, compared to powdered milk where imports remained constant.

Also, with the pick up of more sophisticated coffee shops in Metro Manila and in key growth centers such as Cebu and Davao, there is a surge in demand from these shops.

Clearly, this hugely untapped market is being recognized by local milk producers, not one of them can in fact, supply enough volume to their regular stream of clientele.

Local small-scale production

Yes, it may come as a surprise to most of us, but we do have a growing number of local milk makers, mostly small-scale though.

Some of the more successful private enterprises include Hacienda Macalauan Inc. run personally by businessman and gentleman-farmer Eduardo J. Soriano who picked up from where he left off, back then when he was still with San Miguel and Magnolia.

Soriano began in the 1990s with only a handful of Magnolia dairy cows and subsequently expanded into an integrated dairy farm, including a dairy processing unit, an automated milking parlor and lot feeding system at the foothills of idyllic Mt. Makiling in Calauan, Laguna.

From a modest plant that initially processed a daily average of 100 liters of liquid milk and cheese products, Soriano’s products are now regularly being supplied to major five-star hotels, restaurants and other food chains.

There are other producers though, the numerous dairy cooperatives that have mushroomed in various regions of the country. Each one of these coops rear a few dairy cows and divide the milk or profits among members.

All their production put together however, is not enough to make for a decent commercial quantity. That’s because half of local milk production is absorbed in the local communities where it is produced. The other half goes to school and community milk feeding programs co-funded by local government units.

Constraints on expansion

A major constraint is that while there are financing packages that could be availed of to build up a herd of imported milking cows, many small producers still find the terms too stiff.

It’s also quite expensive to bring in an imported dairy cow which is why local dairy authorities, along with other agencies such as the Philippine Carabao Center should be more aggressive in pushing for crossbreeds that can produce as much milk as imported ones. Right now, herd build up is dependent on imports of tropical crosses from Australia and New Zealand.

Currently, the average milking capacity per animal remains low due mainly to inadequate feeding and poor animal management practices.

Another area that needs to be addressed as we build the dairy sector’s capabilities is quality control. Maintaining the quality of fresh milk is paramount and this concern should not be taken lightly. This is currently a serious concern since domestic dairy production is largely community-based and most of the cooperatives in milk production lack dairy processing facilities and milk delivery vehicles.

This is obviously an area where the government may need to actively intervene – and it has done so for other agri products in recent past, providing reefer vans to vegetable producers in Northern Luzon and in Mindanao so that the quality of their products is maintained until they reach their points of destination in Metro Manila.

Start milking opportunities

The local milk industry still has a long way to go and we need to start now. The agencies focusing on upgrading local cows and buffaloes through its gene pool and extension work should be getting more sustained budgetary support if the country aims to drastically reduce its reliance on imported dairy products.

Rather than just mere knee-jerk reactions to the melamine crisis, our policymakers at the agriculture department should earnestly take a good look at the potentials of the local dairy industry in terms of creating jobs, saving millions of precious dollars for imports and in contributing to economic development.

Collegiate Champions League update

Congratulations to University of Visayas Green Lancers for winning back-to-back CESAFI championships. The top Cebu collegiate team will also once again see action in the elite “Sweet 16” group that will compete in the the last phase in the ongoing SMART-PLDT Philippine Collegiate Championship games.

Other qualifiers in the FilOil Flying V “Sweet 16” Final Challenge are Ateneo Blue Eagles, San Beda Red Lions, De La Salle Green Archers, Jose Rizal Heavy Bombers, San Sebastian College-Recoletos Cavite Baycats and Manuel L. Quezon University Stallions.

Congratulations, too, to Don Bosco Technical College-Mandaluyong and Lyceum of the Philippine-Batangas, champion and runner-up respectively of the recently concluded NCAA-South competitions. Both squads advance to the zonal championships with Don Bosco joining UE Warriors, UAAP fourth placer, at Zone 2 and Lyceum-Batangas competing at Zone 1 with NCAA round-of-four finalist, Mapua Cardinals.

For more details about the biggest collegiate basketball event for the year sponsored by SMART and PLDT, visit the official website, www.CollegiateChampionsLeague.net

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, SalcedoVillage, 1227 MakatiCity. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.