AGRI 22

Introduction to Livestock
and Poultry Production

LECTURE MANUAL
Authors/Contributors:

Amado A. Angeles, PhD

Christian V. Lualhati, MSc
Kimberly I B. Turaja, PhD
Jay Ronel V. Conejos, PhD
John Kenneth T. Malilay, MSc

© 2022 Institute of Animal Science, College

of Agriculture and Food Science, UPLB
AGRI 22 Introduction to Livestock and Poultry Production

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© Institute of Animal Science. 2022. College of Agriculture and Food Science, UPLB, College, Laguna,
Philippines 4031.
AGRI 22 Introduction to Livestock and Poultry Production

I. THE PHILIPPINE DAIRY INDUSTRY

Industry overview

The Philippine dairy industry consists of two distinct sectors: A huge importing and
processing sector which imports, re-process and repacks milk and milk products and the
small milk producing sector composed of formal and informal groups. In terms of the gross
supply, 99% is coming from the importing and processing sector while the remaining 1%
is accounted for by the milk producing sector.

The formal sector under milk producers is made up of about three distinct groups:
The smallholder producers with 1 to 10 head of milk animals; the smallholder producers
with growing dairy herds numbering from over 20 to about 75 head of milk animals; and
the producer-processors that maintain farms with about a hundred milk animals or more,
operate a milk pasteurizing plant and undertake marketing of milk in urban centers. In all
cases, the producer-processors also procure raw milk from smallholders. Hence, the
Philippines’ milk producing sector may be characterized, on the whole, as a smallholder-
based sector.
.

Huge Importing and

Processing Sector
Philippines' Dairy
Industry Informal
Small Milk Producing Group
Sector
Formal
Group

Figure 3. Distinct Sectors of the Philippine Dairy Industry

Production

Domestic production reached 19.48 million liters during the 3rd quarter
(Q3) of 2021 which is 2.55% lower compared with the same time in 2020
(19.99 million liters). In total, the gross earnings in the dairy sector in 2021
(Q3) amounted to P1.035 billion. According to NDA (2021), the average
farmgate price of milk increased from P44.67/liter in 2020 to P53.13/liter in
2021 (Q3). The decline in local milk production may be attributed to the
COVID-19 pandemic and shutdowns that caused feed shortage,
interrupted food supply chain, reduced demand for milk and milk products,
19.48 lack of accessibility to essential veterinary services, milk surplus and
M kg spoilage, among others. Dairy industry will most likely bounce back in 2022
as the COVID-19 pandemic is contained and more economic stimulus
measures are implemented.

© 2022. Institute of Animal Science, College of Agriculture and Food Science, University of the
Philippines Los Baños.

Lecture Syllabus (Dairy Production) | 1

AGRI 22 Introduction to Livestock and Poultry Production

There was an estimated dairy animal (herd) inventory of 68,479 head in January-
September 2021. Of this, dairy cattle registered a number of 24,685 head while there are
17,907 head of carabao and 25,887 of goats. Dairy carabao and goat inventory increased
slightly due to the importation of new dairy breeds and an increase in live births.

CATTLE CARABAO GOAT

24,685 head 17,907 head 25,887 head

(No. of Dams/Does: 10,936 head) (No. of Dams/Does: 6,575 head) (No. of Dams/Does: 10,784 head)

Figure 4. Animal Inventory by Type (NDA, 2021)

The average milk production per animal is 12 liters/day in cattle, 4.5 liters/day in
carabao and 1 to 2 liters/day in goat. Around 62% of total milk produced was cow’s milk while
the rest were carabao’s (32%) and goat’s milk (6%).

In 2021 (Q3), the dairy sector accounted for 0.07% and 0.42% of the total agricultural
and livestock production value (at current prices) of Php 1,436.540 billion and Php 246.908
billion, respectively.

Consumption

The annual per capita milk consumption in the Philippines increased

from ≈17 kg in 2011 to around 22 kg in 2020. The Philippines, with a
fairly stable economy, an expanding middle class and a growing
population of roughly 107 million, has become an attractive and fast-
growing market for milk and dairy products. Other factors contributing
to the long-term trend of strong growth in dairy consumption are
≈22 kg expanding cold chain capacity, an increasing number of supermarkets,
Annual per capita and a blossoming food processing industry (Ang, 2020; PSA, 2012).
Milk consumption

According to National Dairy Authority, one out of every four glasses of fresh liquid milk
(not reconstituted from powder) consumed in the Philippines is produced locally. A Filipino
family can now afford to spend more than P4,000 per year on dairy products.

The greater Manila area remains the major fresh milk market in the country. The price
of fresh fluid milk in a mid-range Manila supermarket is usually in the range of P90 to 120 per
liter (Ang, 2020).

© 2022. Institute of Animal Science, College of Agriculture and Food Science, University of the
Philippines Los Baños.

Lecture Syllabus (Dairy Production) | 2

AGRI 22 Introduction to Livestock and Poultry Production

Imports

The Philippines relies heavily on imports to meet the country’s annual dairy demand.
In 2021, dairy products remained the country’s third largest agricultural import after wheat and
soybean meal. Data from National Dairy Authority showed that the total value of dairy products
imported in the 3rd Quarter of 2021 reached $903.18 million, $97.86 million over than the
$805.32 million recorded in 2020 (Q3). The major suppliers to the Philippines are New Zealand
with 30.74% share of total imports by volume, followed by the United States, Belgium,
Australia and Germany.

Figure 5. Countries of Origin of Imported Dairy Products (NDA, 2021).

About 56.65% of the Philippines’ total milk and dairy products imports in 2021 (Q3)
was milk powder. Of this total, skimmed milk powder constituted the bulk of milk powder
import at 31.05%. Whey, whole milk, and buttermilk powder comprised the total milk powder
imports with a share of 12.86%, 4.06% and 8.68%, respectively (NDA, 2021).

Exports

The export of milk and dairy products grew by 62.79% in 2021 (Q3) compared to 2020
(Q3). The total volume of dairy products exported by the Philippines in January-September
2021 reached 43,000 MT, a much higher than 27,000 MT recorded last January-September
2020. The top Philippine dairy export items in 2021 (Q3) were cream, ice drops/ice milk, and
condensed milk. Malaysia and Vietnam were the top market of the Philippines, accounting for
36.56% and 14.77% of the entire dairy export value, respectively. Next was Singapore that
took 11.64% of the total value and with other countries of destination that include United Arab
Emirates and USA with shares of 7.13% and 5.64%, respectively.

© 2022. Institute of Animal Science, College of Agriculture and Food Science, University of the
Philippines Los Baños.

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AGRI 22 Introduction to Livestock and Poultry Production

REFERENCES

ANG, P. (2020). Dairy and Products Annual (Philippines). USDA Foreign Agriculture Service,
Washington DC.

BOARD OF INVESTMENTS-INDUSTRY STUDIES DEPARTMENT. (2011). Philippine Dairy

Industry. Retrieved at
http://www.philexport.ph/c/document_library/get_file?uuid=bf79c25b-ea6f-4b3f-a3f1-
332f93eb00ea&groupId=127524 on 17 July 2020.

NATIONAL DAIRY AUTHORITY (NDA). (2021). Dairy Industry Data. Retrieved at

https://nda.da.gov.ph/index.php/en/industry-data/comparative-data on 23 February
2022.

NATIONAL DAIRY AUTHORITY (NDA). (2021). Export Destination. Retrieved at

https://nda.da.gov.ph/index.php/en/industry-data/export-destination on 23 February
2022.

NATIONAL DAIRY AUTHORITY (NDA). (2021). Exports. Retrieved at

https://nda.da.gov.ph/index.php/en/industry-data/exports on 23 February 2022.

NATIONAL DAIRY AUTHORITY (NDA). (2021). Import Sources. Retrieved at

https://nda.da.gov.ph/index.php/en/industry-data/imports-sources on 23 February
2022.

NATIONAL DAIRY AUTHORITY (NDA). (2021). Imports. Retrieved at

https://nda.da.gov.ph/index.php/en/industry-data/imports on 23 February 2022.

PHILIPPINE STATISTICS AUTHORITY (PSA). (2012). Dairy Industry Performance Report

(January-December 2012). Retrieved at
https://psa.gov.ph/sites/default/files/dairy_ipr_jan_dec2011.pdf on 17 July 2020.

© 2022. Institute of Animal Science, College of Agriculture and Food Science, University of the
Philippines Los Baños.

Lecture Syllabus (Dairy Production) | 4