"To predict the global economy, focus on the top 20 countries," said Jeffrey Rosensweig, director of the Gouizueta Business School of Emory University. In making that statement, he alluded to the fact that the 80-20 rule applies to world economies just as it does to customers . . . 80 percent of sales are generated by 20 percent of your customers. For dairy exports, knowing how these economies are faring is important to one's business.
"Key economies projected to grow in 2016 and 2017 (in order) are India, China, Indonesia, Turkey, Nigeria, Mexico and South Korea," explained Rosensweig, who has the Twitter handle @TheGlobalGuru. "The fastest growing economies also are the most populous - India, China and Indonesia. That is good news for dairy and exports," said Emory's program director for global perspectives. He also explained that even though China's growth has slowed, it still has been strong compared to most economies.
While China remains the world's largest dairy importer, Rosensweig believes India has a bright future. For one, it is a democratic society, which allows for a freer flow of ideas. Then there is the sheer numbers factor.
"Within seven to eight years, India will pass China for the world's largest population," said Rosensweig, reminding the audience that the U.S. has the third most people of any country. He also had another sign pointing to India's growing status.
"Immigrants from India to the U.S. are the largest income-generating demographic of any group," said Rosensweig.
As for the near term economic forecast, it could be a bit choppy, Rosensweig told those attending this year's Dairy Forum hosted by the International Dairy Foods Association.
"Among the world's largest 20 economies, Russia and Brazil are having trouble," he said. "Brazil's GDP (Gross Domestic Product) could fall 2.7 percent in 2016 and Russia could be close to that number."
Even though dairy is experiencing lower milk prices, the sector is not as volatile as other industries. Rosensweig notes products that consumers forgo purchases on for another year, such as automobiles, often suffer far more in a sluggish economy.
(c) Hoard's Dairyman Intel 2016
February 22, 2016
