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IFCN Methods

1. IFCN Monthly Public Indicators (Milk price & feed price)

2. IFCN Standardization

3. IFCN Typical Farm Approach

1. IFCN Monthly Public Indicators

IFCN Combined World Milk Price Indicator

World Milk Price

IFCN Combined World Milk Price Indicator: Based on the weighted average of 3 IFCN world milk price indicators: 1. SMP & butter (~32%), 2. Cheese & whey (~51%), 3. WMP (~17%), based on quarterly updated shares of the related commodities traded on the world market.

Latest update: 12.11.2024

Data table: IFCN World Milk Price Indicator in USD / 100 kg SCM*
(*Solid Corrected Milk: 4.0% fat, 3.3% protein)

Jan   Feb  Mar Apr   May  Jun Jul  Aug  Sept Oct  Nov  Dec
 2006 23.9 24.1 23.9 23.4 23.1 22.9 23.1 23.4 23.5 24.1 26.0 29.2
 2007 30.3 32.5 34.2 37.1 39.7 42.4 48.3 51.3 51.5 52.0 53.3 52.7
 2008 50.2 47.7 46.7 45.0 45.4 45.7 45.2 42.0 36.6 33.0 28.0 24.6
 2009 20.4 19.3 20.1 20.8 21.5 21.4 22.2 24.2 28.5 32.5 40.6 41.8
 2010 37.9 36.2 36.1 39.5 40.9 39.2 37.4 37.1 38.8 39.8 40.1 40.6
 2011 43.9 47.4 47.9 45.9 46.2 46.4 45.2 44.0 42.6 40.7 40.5 41.1
 2012 41.5 40.9 39.5 37.0 35.3 34.5 34.1 35.3 38.0 39.3 39.6 40.0
 2013 40.3 41.2 45.7 53.7 51.2 48.7 48.7 49.5 49.7 50.3 50.7 53.2
 2014 54.1 55.8 54.4 49.5 46.9 44.7 43.3 39.9 36.6 35.0 33.6 33.2
 2015 33.8 36.8 34.9 32.4 30.8 29.1 23.8 24.5 27.3 28.7 26.7 26.4
 2016 25.5 24.2 22.4 22.2 22.1 24.3 25.2 28.9 33.5 34.3 34.8 35.8
 2017 36.1 37.2 35.7 34.7 36.3 38.6 39.2 38.7  39.1 37.3 35.1 31.9
 2018 31.9  35.0  35.0 36.0 38.0 37.2 35.0 34.6 33.7 32.2 31.3 30.9
 2019 33.7 35.9 38.5 40.9 42.1 36.5 36.4 36.4 36.2 36.1 37.3 37.4
 2020 38.3 39.9 38.7 38.1 35.6 34.9 36.0 33.9 34.5 35.7 35.2 37.4
 2021 40.5 43.0 45.9 46.8 46.4 45.2 42.6 41.7 43.1 44.4 49.5 51.5
 2022 54.7 58.8 62.7 63.4 58.5 55.8 51.8 49.2 49.8 46.6 44.3 44.0
2023 42.8 43.2 41.1 39.6 41.8 43.7 38.4 36.5 36.4   37.2 38.0 39.4
2024 40.9 43.0 42.1 42.3 43.4 44.5 43.8 43.3 44.6

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Combined IFCN World Milk Price Indicator illustrates the world market price level for milk. It represents the milk price a milk processor could theoretically pay to its farmers, if it was selling its products on the world spot market and producing at standardised costs. A wide range between IFCN World Milk Price Indicators indicates economic stress for specialised dairies, if their main product is trading at the lower bound of the range.

It is based on the weighted average of 3 IFCN world milk price indicators: 1. SMP & butter (~32%), 2. Cheese & whey (~51%), 3. WMP (~17%), based on quarterly updated shares of the related commodities traded on the world market.

 

The calculation of the IFCN World Milk Price Indicators is based on the weighted average of three IFCN World Milk Price Indicators:
1. SMP& butter, 2. cheese & whey and 3. WMP.
Before June 2019, this set of dairy commodity bundles were weighted based on shares of related commodities traded on the world market and these shares were fixed for the whole time series of the indicator: 45% Cheese & Whey, 35% SMP & Butter and 20% WMP. Since June, the new approach is based on flexible trade shares which means that the share of the commodity on total dairy trade is calculated for each quarter.
The price is still the Oceania commodity export price weighted -now- by the quarterly trade shares for the commodities. This method is more precise and more market-oriented as it takes into account changes in import demand and seasonal trade patterns. Trade share calculations are based on the IFCN Trade Database.

 

Data Table: Trade shares per quarter 

Q1 Q2 Q3 Q4
SMP&
Butter
Cheese
&Whey
WMP
SMP&
Butter
Cheese
&Whey
WMP
SMP&
Butter
Cheese
&Whey
WMP
SMP&
Butter
Cheese
&Whey
WMP
2006 0.31 0.50 0.19 0.32 0.49 0.19 0.32 0.52 0.16 0.33 0.50 0.17
2007 0.31 0.50 0.19 0.32 0.52 0.15 0.29 0.57 0.14 0.30 0.52 0.18
2008 0.30 0.52 0.18 0.31 0.52 0.17 0.29 0.55 0.16 0.29 0.51 0.20
2009 0.31 0.50 0.19 0.32 0.50 0.18 0.30 0.53 0.17 0.32 0.50 0.18
2010 0.30 0.51 0.19 0.31 0.51 0.18 0.31 0.54 0.16 0.32 0.48 0.19
2011 0.31 0.49 0.20 0.31 0.51 0.18 0.30 0.55 0.15 0.31 0.50 0.19
2012 0.29 0.47 0.24 0.31 0.51 0.18 0.30 0.52 0.18 0.32 0.50 0.18
2013 0.31 0.49 0.19 0.31 0.53 0.16 0.31 0.54 0.15 0.32 0.47 0.21
2014 0.32 0.48 0.20 0.33 0.50 0.17 0.32 0.54 0.14 0.32 0.48 0.19
2015 0.33 0.48 0.19 0.33 0.51 0.16 0.33 0.52 0.15 0.33 0.47 0.19
2016 0.34 0.49 0.17 0.33 0.50 0.17 0.33 0.53 0.14 0.33 0.49 0.18
2017 0.32 0.51 0.17 0.33 0.52 0.16 0.32 0.54 0.13 0.32 0.50 0.18
2018 0.33 0.50 0.17 0.34 0.51 0.15 0.33 0.53 0.14 0.33 0.48 0.19
2019 0.35 0.48 0.17 0.30 0.56 0.14 0.29 0.59 0.11 0.30 0.55 0.15
2020 0.30 0.55 0.15 0.34 0.50 0.16 0.32 0.54 0.14 0.31 0.50 0.19
2021 0.32 0.50 0.18 0.33 0.51 0.17 0.26 0.64 0.11 0.27 0.59 0.14
2022 0.33 0.51 0.16 0.32 0.53 0.15 0.29 0.59 0.12 0.32 0.50 0.18

Latest Update: 28.03.2023

 

*In order to be able to show comparable outputs, the IFCN converts all milk with natural contents into solid corrected milk (SCM). Thus, milk outputs with 4.0% fat and 3.3% protein are generated. The formula applied is:

SCM = milk production * (fat % + true protein %) / 7.3

IFCN World Feed Price Indicator

Feed price

Latest update: 12.11.2024

Data Table: IFCN World Feed Price Indicator in USD / 100 kg

Jan   Feb  Mar Apr   May  Jun Jul  Aug  Sept Oct  Nov  Dec
 2006  13.2 13.4 13.1 13.3 13.5 13.6 13.6 13.3 13.7 15.8 17.9 17.4
 2007  18.2 19.7 19.1 17.3 17.8 19.0 17.9 18.1 19.9 20.5 21.4 23.2
 2008  25.7 27.3 27.8 28.5 28.1 33.2 32.3 28.1 27.3 21.5 20.3 19.9
 2009  22.3 21.0 21.0 22.3 24.9 25.8 22.2 22.6 20.8 21.6 22.1 21.9
 2010  21.5 20.4 19.9 20.3 20.6 20.1 21.5 22.5 24.4 27.1 27.8 29.2
 2011  30.9 32.8 32.1 34.0 33.2 33.5 32.7 33.5 32.2 29.7 29.1 27.7
 2012  29.5 30.5 31.8 32.4 32.6 32.6 39.9 40.8 39.2 38.1 37.2 36.3
 2013  34.9 35.2 35.7 33.0 35.0 35.9 35.4 30.6 29.2 27.9 27.8 28.7
 2014  28.1 29.6 30.8 31.6 31.5 29.8 26.3 25.8 23.7 22.8 25.2 25.0
 2015  23.6 23.4 23.1 22.5 21.9 22.3 24.4 22.5 21.9 22.1 21.2 20.6
 2016  20.2 19.9 20.0 21.3 24.0 25.9 23.4 21.4 20.7 20.8 21.0 21.1
 2017  22.1 22.5 21.8 21.2  21.3  21.0  21.7  20.3  20.4  20.8  20.9  21.1
 2018 21.7  23.4  24.4  24.9 25.2 23.0 21.9 22.0 21.1 21.6 21.4 21.9
 2019 22.0 22.0 21.7 21.4 21.8 24.2 23.4 21.2 20.7 21.8 21.6 21.5
 2020 21.9 21.4 21.6 20.0 19.5 19.8 20.3 20.1 22.3 25.2 26.2 27.2
 2021 31.1 31.3 30.7 32.4 35.1 32.9 31.4 29.7 27.7 27.4 29.1 31.3
 2022 33.1 35.4 39.4 39.5 38.0 37.7 37.9 36.0 35.9 37.6 36.1 36.1
 2023 36.8 37.1 35.3 35.3 32.6 32.1 31.2 28.6 28.7 28.5 29.4 27.7
 2024 25.9 24.5 24.5 24.7 26.1 25.8 23.0 22.4 23.1  23.5    

 

The IFCN World Feed Price Indicator represents the world market price level for feed. It is based on the prices for soybean meal and corn, originating from their shares in a simplified compound feed ration.

 

Milk: feed price ratio indicator

Jan   Feb  Mar Apr   May  Jun Jul  Aug  Sept Oct  Nov  Dec
 2021 1.30 1.37 1.50 1.45 1.32 1.37 1.36 1.41 1.56 1.62 1.70 1.64
 2022 1.65 1.66 1.59 1.61  1.54 1.48 1.37 1.37  1.39 1.24 1.23 1.22
 2023 1.17 1.17 1.17 1.12 1.28 1.32 1.23 1.28 1.27 1.26 1.29 1.42
 2024 1.6 1.8 1.7 1.7 1.7 1.7 1.9 1.9 1.9 2.0

 

 

Feed price ratio

Latest update: 26.11.2024

The milk:feed price ratio is defined as milk price divided by the price of purchased feed (IFCN Combined World Milk Price Indicator / IFCN World Feed Price Indicator).

In a simplified form it shows how much feed (kg concentrates) a farmer can buy after selling one kg of milk. A milk:feed price ratio >1.5 is considered favourable, in this case high yield / high input systems can be used. In simple terms, the higher the ratio is, the more economical it is to use concentrates.

2. IFCN Standardization

In its annual analysis IFCN relies on the following key standardization to ensure comparability of the global data used:

  • Energy-corrected milk (SCM) adjustment: converting milk natural contents into energy corrected milk of 4.0% fat and 3.3% protein.
  • Milk equivalents (ME): in simple words this conversion shows how much milk is used to produce one unit of a certain commodity. IFCN ME conversion is based on the selected “fat and protein” method.
  • Conversion of litres to kilograms: IFCN applies metric values for mass rather than volume (1 litre = 1.033 kg).

3. IFCN Typical Farm Approach

The annual farm comparison activities of the IFCN are based on the Typical Farm Approach, the panel approach and the analysis with the TIPI-CAL Model.

In the IFCN, a typical dairy farm represents a certain production system, farm size, production technology used and the related milk volume in a country/dairy region. The first farm is normally an average sized farm with an average management performance. The second farm is larger but also with an average management performance, to show economies of scale. The approach of typical farms in combination with the panel approach (meeting of one to five farmers, one advisor and one scientist) has been proven to be very practical. Compared to statistical approaches, the advantage of the IFCN concept is that in-depth analysis is possible.

The TIPI-CAL Model (Technology Impact and Policy Impact Calculations) is an analytical tool for production, economic and environmental aspects of dairy farms. It was initially developed by Torsten Hemme (Hemme 2000). Since then it has been continuously refined by IFCN to suit recent challenges, including optional modules on green-house gas analysis, feed, water, risk analysis, farm supply reaction analysis and scenario modelling.

The core model allows to compare the typical farm data worldwide and also in different regions and countries, with farms of different sizes and legal forms, under different policy, market and technical scenarios. The TIPI-CAL enables the ranking of impacts of anticipated policies and farm strategies on dairy farms, hence serving as a dairy development guide.

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