SETTING TARGETS FOR LOCAL MILK PRODUCTION

SETTING TARGETS FOR LOCAL MILK PRODUCTION

My dear countrymen, according to ChatGPT, “the Philippines' demand for dairy products is substantial and growing. In 2025, consumption is projected to reach 3 million metric tons (MMT) in liquid milk equivalent (LME), a 2% increase from 2024. Domestic milk production remains limited, meeting only about 1% of the country's total dairy requirements. In the first half of 2024, local production was approximately 16,020 metric tons, accounting for just 21% of the total liquid milk supply during that period. Consequently, the Philippines relies heavily on imports to satisfy its dairy needs, sourcing 99% of its supply from international markets. This growing demand is driven by factors such as an expanding middle class, population growth, and increasing consumer spending on dairy products. Despite efforts to boost local production, the significant gap between domestic output and consumption necessitates continued reliance on imports to meet the country's dairy needs”.

Also, according to ChatGPT, “comparative advantage and competitive advantage are economic and business concepts that describe different aspects of an entity's ability to succeed in a market”. Here are the differences according to the AI:

Comparative advantage is a concept from economics that occurs when a country, business, or individual can produce a good or service at a lower opportunity cost than its competitors. It focuses on efficiency and resource allocation. And it emphasizes specializing in goods where a country or entity is relatively more efficient.

For example, country A produces wine more efficiently than textiles. Country B produces textiles more efficiently than wine. Even if Country A is better at producing both, it benefits by specializing in wine and trading with Country B for textiles.

On the other hand, competitive advantage is a concept from business strategy that refers to an entity's ability to outperform competitors by creating superior value for its customers, either through cost leadership, differentiation, or focus. It emphasizes unique attributes or capabilities that give an edge over rivals.

For example, a company that offers innovative features in its product (e.g., Apple's focus on design and ecosystem integration) has a differentiation advantage, or a company with highly efficient operations that allows it to sell at a lower price (e.g., Walmart) has a cost advantage.

Obviously, we neither have the comparative advantage nor the competitive advantage when it comes to exporting milk. That is so because we are not producing enough milk, and as a matter of fact, we are importing about 99% of our domestic milk requirements. However, we do have both advantages when it comes to bananas, hence it makes perfect sense to trade our bananas with milk from New Zealand. The question is, should we keep on producing milk if we could just keep on trading our bananas with milk?

My answer is yes, and as a matter of fact, we should make it our national goal to produce 100% of our domestic milk requirement. Beyond that, we should also make it our national goal to become a net exporter of milk. The reasons for that are obvious. Milk production not only creates livelihood, but it also ensures our food security. Not only that, it can also solve our problem of child wasting, child stunting and child malnutrition. Your friend, IKE SENERES/01-02-25/visit my blog senseneres.blogspot.com