Balchem Corporation · NASDAQ:BCPC
Balchem — Conference Presentation (December 2024)
28 slides from Balchem's conference presentation, Dec 3, 2024
Slide 1: Global Dairy Outlook: Implications for 2030 and beyond
Global Dairy Outlook Implications for 2030 and beyond Mary Keough Ledman Global Dairy Strategist December 3, 2024 Mary Keough Ledman, Global Dairy Strategist Sandy Chen, Senior Analyst China Andres Padilla, Senior Analyst South America September 6, 2021
Slide 2: Rabobank is the leading bank for the global food sector
Rabobank is the leading bank for the global food sector through its strategic pillar: Banking for Food Mission: Growing a better world together Dairy Top 20 companies Among Top 50 banks globally Ratings: €614bn balance sheet total, active in 36 countries Moody’s: Aa2 S&P: A+ 17/20 Fitch: A+ Farm inp
Slide 3: RaboResearch Dairy Team
RaboResearch Dairy Team Vacant Analyst Mary Ledman Global Strategist Michelle Huang Senior Analyst Utrecht Lucas Fuess Senior Analyst Chicago Shanghai Emma Higgins Senior Analyst Andres Padilla Senior Analyst Sao Paulo Michael Harvey Melbourne Senior Analyst Nelson 3
Slide 4: Milk production growth, Big 7 exporters and China, 2020-2025f
Milk production growth, Big 7 exporters and China (actual and RaboResearch forecast), 2020-2025f* 3.0 2.0 1.0 billion liters - -1.0 -2.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3e Q4f Q1f Q2f Q3f Q4f 2020 2021 2022 2023 2024 2025 US Oceania EU South America China 4 *Note: The Big 7 in
Slide 5: Dairy commodity prices, FOB Oceania, 2020-2024
Dairy commodity prices, FOB Oceania, 2020-2024* 8,000 6,000 USD/metric ton 4,000 2,000 - 20 21 22 23 24 20 20 20 20 20 Butter SMP WMP Cheese Whey powder 5 *Note: Whey is FOB in western Europe. Source: USDA, RaboResearch 2024
Slide 6: Shifting competitiveness: farmgate milk prices
Shifting competitiveness Farmgate milk prices (USD equivalent) - select regions 0.80 0.70 0.60 0.50 USD/liter 0.40 0.30 0.20 0.10 19 20 21 22 23 24 20 20 20 20 20 20 China Netherlands (FCampina) NZ (Fonterra) US (All Milk Price) Ireland (Tirlan) Sources: Dairy company media releases and annual repor
Slide 7: Global dairy imports thru August 2024 vs. prior year
Global dairy imports thru August 2024 vs. Prior year Metric Tons Product Qty YOY % Chg. 1,600K Whey 1,696,842 7% 1,400K SMP 1,488,707 (4%) WMP 1,247,632 0% 1,200K Cheese 1,490,740 10% 1,000K Butter & Fat 494,359 -8% Milk & Cream 556,339 -6% 800K Casein 122,974 20% 600K Total 7,097,582 2% 400K 1,000K
Slide 8: Index currencies vs. USD (Jan 2014 = 100)
8 Index currencies vs. USD (Jan 2014 = 100) 100 110 60 70 80 90 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Source: UDM Board of Governors of the Federal Reserve System, RaboResearch 2024 Oct-21 Jan-22 EUR Apr-22 AUD Jul-22 NZD Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Exchange rates, USD vs. e
Slide 9: Q4 Global Dairy Quarterly Forecasts
Q4 Global Dairy Quarterly Forecasts Butter Forecast (US$/mt) Skim Milk Powder Forecast (US$/mt) 10,000 3,500 8,000 3,000 6,000 2,500 4,000 2,000 2,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3e Q4f Q1f Q2f Q3f Q4f Q1 Q2 Q3 Q4 Q1 Q2 Q3e Q4f Q1f Q2f Q3f Q4f 2023 2024 2025 2023 2024 2025 Europe US Oceania Europe US Oceania
Slide 10: Q4 Global Dairy Quarterly Forecasts
Q4 Global Dairy Quarterly Forecasts Cheese Forecast (US$/mt) 6,000 Dry Whey Forecast (US$/mt) 1,500 5,000 1,250 1,000 4,000 750 500 3,000 250 2,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3e Q4f Q1f Q2f Q3f Q4f Q1 Q2 Q3 Q4 Q1 Q2 Q3e Q4f Q1f Q2f Q3f Q4f 2023 2024 2025 2023 2024 2025 Europe (Gouda) US (Cheddar) Oceania
Slide 11: Implications for China's increased dairy self-sufficiency
Implications for China’s increased dairy self-sufficiency
Slide 12: Setting the stage: global milk production is dominated by few players
Setting the stage…. Global milk production is dominated by few players 180 160 140 India (cow) Million metric tons EU 27 120 United States of America 100 China 80 Russia Brazil 60 New Zealand 40 Argentina Australia 20 0 2015 2022 12 Source: World Dairy Situation 2023.
Slide 13: Where there's a will there's a way
Where there’s a will there’s a way 2018 policy directives stimulated large-scale dairy expansion with the objective of growing China’s domestic milk supply from 31m mt to 41m mt by 2025. 50,000 China’s Annual Milk Production 40,000 000 metric tons 30,000 20,000 10,000 0 2015 2016 2017 2018 2019 2020
Slide 14: Large-scale dairy farms dominate China's supply
Large-scale dairy farms dominate China’s supply Driven by favourable government policies and productivity focus Herd size of listed dairy farming companies (2023) Productivity focus (Milk yield comparison of listed dairy farms, MT per year, 2023) 600 14.0 13.6 12.6 Average milk yield, per milkable c
Slide 15: The outlook is for slower growth in Chinese milk production
The outlook is for slower growth in Chinese milk production It appears that the cure for high prices is high prices – even in China. 50000 CAGR% `1.4% 40000 7% 000 tons 30000 20000 10000 0 2019 2023 2035f 15 Source: National Bureau of Statistics, China Dairy Data Report 2023, Holstein Farmer, Raboba
Slide 16: Historically Whole Milk Powder dominated global dairy trade
Historically Whole Milk Powder dominated global dairy trade With China being the largest importer and New Zealand being the largest exporter 900 China’s Annual WMP Imports (1,000 MT) 600 300 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 New Zealand ROW 16 Source: Trade Data
Slide 17: Who Moved My Cheese?...or My WMP?
“Who Moved My Cheese?”…or “My WMP?” New Zealand pivots its product mix New Zealand’s Annual Dairy Product Exports 3,000 2,500 401 472 421 451 361 2,000 323 374 326 340 352 451 1,500 357 1,000 1,506 1,620 1,326 1,365 500 - 2020 2021 2022 2023 WMP SMP Cheese Butterfat 17 Source: Trade Data Monitor, Ra
Slide 18: The ability to move into other WMP markets is limited
The ability to move into other WMP markets is limited Algeria is a distance second, followed by even smaller importers 900 Global WMP Imports by Country (1,000 MT) 600 300 0 2018 2019 2020 2021 2022 2023 China Algeria Belgium Germany Netherlands Egypt 18 Source: Trade Data Monitor, Rabobank 2024.
Slide 19: The Next Domino: Rising SMP exports
The Next Domino: Rising SMP exports Increased competition and greater SMP buying opportunities Annual Exports Annual Exports 2.5 2.5 2.0 2.0 million metric tons Million metric tons 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 2010 2012 2014 2016 2018 2020 2022 2010 2012 2014 2016 2018 2020 2022 NZ SMP US SMP EU
Slide 20: 2035 Dairy Supply and Demand Outlook
2035 Dairy Supply and Demand Outlook
Slide 21: An additional million people underpins dairy demand
An additional 705 million people underpins dairy demand Growth in dairy consumption from 2020 to 2030 due to population growth and change in per capita dairy demand 80 140 70 120 60 Billions KG Milk Equivalent 100 50 (Million People) 80 40 60 30 40 20 10 20 0 0 Sudan Nigeria Uganda D.R. Congo Angola
Slide 22: Sans India and Pakistan, these are the top growing markets
Sans India and Pakistan, these are the top growing markets Forecast growth in dairy demand, 2020 to 2030 8 Billions KG Milk Equivalent 7 6 5 4 3 2 1 0 -1 Uganda Angola Brazil Indonesia Iraq Niger Nigeria D.R. Congo Kenya USA Ethiopia Egypt Mexico Tanzania China Bangladesh Philippines Population Effe
Slide 23: Global dairy supply and demand outlook: Import Bridge
Global dairy supply and demand outlook Estimated growth in dairy trade in milk equivalents 2035 vs. 2023 Import Bridge: million tons liquid milk equivalents 160 120 4.5 1.5 2.5 0.5 5.0 2.5 1.0 2.5 80 115 95 40 0 2023 Imports Africa South Cent. North Middle Indian SE Greater Trade America Amer/Carib
Slide 24: Change in milk production growth will impact global trade
Change in milk production growth will impact global trade 35 30 25 19 20 (Million MT) 15 8 10 16 14 5 5 11 - 2 (5) -10 (0.3) -0.4 (10) (15) EU 27 US Oceania SA China 2023 v 2011 2035 v 2023 24 Source: Rabobank 2024
Slide 25: Global dairy supply and demand outlook: Export Bridge
Global dairy supply and demand outlook Estimated growth in dairy trade in milk equivalents 2035 vs. 2023 Export Bridge: million tons liquid milk equivalents 160 20.0 120 8.0 2.5 80 115 95 40 0 -0.5 -10.0 -40 2023 Exports EU 27 Oceania South America US Opportunity Exports 2035 25 Source: Rabobank 202
Slide 26: An aging population changes type of dairy consumed
An aging population changes type of dairy consumed Change in population by age category vs. prior decade 500 China’s population under 20 years 400 old falls by 61 million. In contrast, its population over 50 increases by 100 300 million. (number of people) 200 India’s working-age population growth u
Slide 27: An aging population changes the type of dairy consumed
An aging population changes the type of dairy consumed Change in age category vs. prior decade 30 Demand growth driven by: 20 • Increased purchasing power of the expanding 20–50-year- 10 old population. (number of people) 0 • Increased life span will drive growth in health, wellness, -10 and medical
Slide 28: Thank you for your attention!
Thank you for your attention! This document is meant exclusively for you and does not carry any right of publication or disclosure other than to Coöperatieve Rabobank U.A. (“Rabobank”), registered in Amsterdam. Neither this document nor any of its contents may be distributed, reproduced, or used for