'You won't make it in East Germany with milking alone'

Dairy farmer Jan Dijkstra (37) emigrated to Tempelfelde in Germany in 2006. He is a dairy farmer, but in 2016 he bought about 50% of the shares of his neighbor's arable farm and wants to invest in a biogas installation this year. Dijkstra tells how he looks back on 2017 and also looks ahead to 2018.

How is your company doing in terms of size and growth plans?
"We keep 450 cows and 450 young stock on our farm. The cows produce an average of about 27 liters per day (with 3,50% protein and 4,30% fat). They have been milked for several months in a new aan-zij milking parlor', which we realized in the existing buildings. The old milking parlor was exhausted. The new milking parlor is a good step forward. After some teething problems at the start, it is now running satisfactorily. The dairy sector includes 475 hectares of land and 225 hectares we grow silage maize. We also grow alfalfa and slicing rye (prior to silage maize and wheat). Some of the land is unmarketable and is fallow. Processing that land costs more than it yields. These plots cost about €150 in lease per hectare and yields €300 in payment entitlements, which is why it is possible."

What are the plans for the new year?
"We can grow to 600 cows at this location. The stables have to be refurbished, both for dairy cattle and young stock. The milking parlor is new, but the rest is dated. Another plan is to start up a biogas installation. How big I am currently still investigating the installation to run as economically as possible. Up to 75 kilowatt hours (kWh) the subsidy is €0,23 for the power you supply, which is probably possible for 15 years. Especially now that we also have to comply with at least 6 months of manure storage. More intensive companies even for 9 months. However, you no longer receive the subsidy partly on the investment, only on the energy you gain from manure. It used to be interesting to use maize or other products in a fermenter. The situation is different with the new subsidies. I also want to make this investment to spread my risks. Milking alone is too risky."

Is the purchase of the arable farm in 2016 also because of the desired risk spread?
"Indeed. 2017 seemed like a good year, but that only applies to the last few months. The basic milk price that I received on average over the year was €0,33. That still yields little margin. In 2015 and 2016 the price was bad, even up to €0,20. Then milking costs serious money. I also took over the arable branch, because the company is right next to mine. The neighbor only comes up for sale once. In total, it concerns 1 hectares. I have 1.400% of the shares, another Dutchman has the other half. We grow rapeseed, rye, wheat, barley, sunflowers, grain maize and soya for the dairy farm. I have been here for 50 years now and started with 11 cows and 200 hectares. good indicators, you can continue to get financing to move forward, but that is hardly possible with milking alone. I have learned so much already."

You deliver to DMK. Is that the best party for your company?
"DMK isn't the best, but it isn't the worst either. I can switch to other dairies, but choose certainty. Especially because the market has been very difficult to read in recent years. The market is unpredictable. Butter is expensive in the store, but prices are falling. Demand seems to be there, but then again not. Who still understands that? That's what I mean by uncertainty. With a sustainability program you can earn a plus at DMK. Pasture grazing is one of the things where you If you can score points, I'm not participating in that. Grass doesn't grow well on my soil and the torque is too big."

"With other things such as health scores and sufficient space for the cows, I get €0,01 extra milk money. The proportion of concentrates that you feed is also part of this. As of 1 July this year, it must be GMO-free, otherwise it will cost As a supplier, it is €0,01 milk money for me as a supplier. Developments in that area are continuing here just as well as with you in the Netherlands. All to show the consumer our good will. That will probably work, but the market is still determined by demand In the Netherlands things may change more quickly, but here most people don't want to spend a lot of money on dairy. They always opt for the cheapest offer in the supermarket."

How do you hope and expect your company to be in 5 years' time?
"In 5 years' time we will probably be milking 600 cows at this location, together with a well-functioning biogas installation and arable farming branch. I don't foresee more growth at first, but that may just come. The arable farm also came my way, I had not foreseen that The focus is on efficiency, where there is really a lot to gain from our company in the coming years."

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.