'Beet pressed pulp for as many liters of milk as possible'

The pre-sale of beet pressed pulp is in full swing and in high demand. More and more dairy farmers are using co-products for optimal milk production. Kai Kikkers, director of Feed at Duynie, provides explanations. 

Since May 1, Duynie has started with the presale of beet pulp† How is the registration going so far?
'So far registration is going well, with volumes finding good sales. Last year the first presale started somewhat hesitantly. That is not the case this year. The product also charges favorably, with interesting feed value prices. Compared to a wider supply (larger acreage of sugar beet), there is good demand. Pressed pulp has gained popularity in the past year. Due to a poor maize harvest, dairy farmers reconsidered the use of co-products in 2016, including pressed pulp. This group, mainly dairy farmers from the south, are now showing interest again. In the first 3 weeks of the pre-sale (first price quotation), the vast majority of the total available volume is sold. I do expect that there will be a second price quotation. Whether it also comes to a third price quotation depends on the growing season. The campaign conditions with the flexibility discount remain the same. The price is variable and is lowest in the first price quotation.'

How flexible are dairy farmers in general?
'Dairy farmers are rewarded for their flexibility with a maximum discount of 8 cents per percent dry matter. Using this flexibility, our planners can optimally tailor the pressed pulp to be delivered to the region where beets are loaded. In 2016, 80 percent of the volume could be sold completely flexibly. This year the provisional percentage is even 90 percent. We are pleased with this development and appreciate the flexible installation space available to customers.'

The presale of Cigarant has already been stopped, was there (too) much demand?
'There is indeed a lot of demand for Cigarant. The price difference between Cigarant and beet pressed pulp is smaller than before, but farmers who are familiar with Cigarant nevertheless opt for this product. However, stopping the presale also has to do with the offer. The number of sown hectares of chicory this year is lower than in 2016. That is why there is less supply of Cigarant available. Incidentally, the volume of Cigarant is a small flow if you compare it with pressed pulp. Pressed beet pulp is the largest flow on the co-product market with approximately 1 million tons. The volume of Cigarant is approximately 4 percent of pressed pulp. It is therefore a niche market with mainly existing customers.'

Last year you started a feed subscription for campaign feeds, was this a success?
'You should really ask our customers with a feed subscription that. In any case, we are very satisfied and the stories from the field are also good. Banks and accountants are also positive. We notice that the demand for a feed subscription continues to increase. Currently, almost 1 in 4 customers make use of the option to pay in installments over 12 monthly payment instalments.'

Is there less urgency now that milk prices have risen?
'A feed subscription is not only intended to meet dairy farmers in difficult times. A feed subscription can also be interesting with a stable and profitable milk price. Since the disappearance of the milk quota, the dairy market has become more volatile. An entrepreneur must guard against this. A feed subscription offers the option of absorbing price peaks on the cost side. I would advise dairy farmers who purchase 150 tons or more of pressed pulp to see what a feed subscription does to the liquidity position.'

By the way, have you noticed a drop in demand due to the phosphate reduction plan?
'There are sometimes big differences at individual company level. On balance, however, we notice little change compared to sales in previous years. I'm taking a stab at this one, though. What we do notice is that dairy farmers are striving even more for the optimum ration for as many liters of milk as possible. Co-products, such as pressed pulp, are in many cases a nice addition to the ration. On average, co-products are favorable in the ratio P/VEM or P/DVE. Despite the fact that the feed track in the phosphate reduction plan only applies to compound feed, we are well aware of the need for phosphate reduction. We also ship here. In the past year we created a market outside the Netherlands for a stream that does contain a higher amount of phosphate and until recently was only sold in the Netherlands. Incidentally, there is much to be said about how Dutch dairy farming has been treated by politicians, and our dairy farming sector (mainly family farms) has not deserved the uncertainty that this creates.'

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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