Drop in milk price could save farmers a ton

The average income for dairy farmers is estimated for 2025 At €120.000 per unpaid annual labor unit (AUU), €46.000 more than in 2024 and €53.000 higher than the average for the past four years. The average milk price, at €56 per 100 kilos, including supplementary payments and allowances, was 9% higher than in 2024. As is known, the milk price has fallen significantly in recent months. According to Beldman, the lower milk price translates into €100.000 to €150.000 less in revenue for an average farm. "If you add to that the fact that manure disposal costs for an average farm are also rising again, it could become quite difficult for some companies." 

According to WUR experts, the critical milk price is high, in the €40s, almost €50s, and we're now starting to fall below that level. "It remains difficult to predict how that price will develop in the coming year, but I think many dairy farmers are quite concerned about it," says Beldman.

In the long term, he says, the main concerns lie in "ongoing policy uncertainty," which makes long-term decisions difficult. "You're naturally dependent on the market, and that always involves uncertainty. Dairy farmers are used to a lot, but now there's also uncertainty about the scope for business development. It seems the sector needs to become more land-based, so land is an investment you won't easily regret, but other investments are simply difficult. You do see some companies opting for things like nitrogen strippers because they hope they'll eventually be able to keep more livestock, but there's no certainty about that."

Will a new cabinet bring clarity? "We've been saying that for a few cabinets now, that there needs to be more clarity, but that hasn't really happened yet. The focus is very much on nitrogen, but that also applies to climate policy: there's a target, but no translation into what it means for the individual farmer. The same applies to the Animal Dignity Act: what requirements will apply there exactly? And in two years, we'll have the evaluation of the Water Framework Directive, and we probably won't meet the targets there either.

Large income differences within the sector
There are significant income differences within the sector. Beldman points out that these differences have always existed. Sector expert Jakob Jager adds: "If income is very high, then the spread is often also very high. You see that the spread increases somewhat over the years. But there's also the effect of scale; companies are, on average, getting bigger and bigger, and as a result, income levels are also rising." 

Generally speaking, larger farms have higher incomes, but even between farms of similar size, there are significant differences in income, Beldman points out. "It's mainly a matter of technical performance. How much feed do you harvest from your land, and how well do you convert it into milk? There are truly significant differences between farms in that regard." 

Organic farms achieved their highest average income ever in 2025. Meanwhile, the share of organic milk has stagnated at 2,2% of the volume. The percentage of organic dairy farms is increasing, but experts say this can be explained by the continued decline in the number of conventional farms. The number of organic dairy farms remained the same this year.

The main trend Beldman sees over a longer period is one of continuous, very gradual scaling up and intensification. Beldman: "Especially in milk production per hectare. Every year it's a step up: four, five, six more cows, and milk production per cow is actually rising continuously every year." Jager also mentions the cost price of milk as a trend. "It's been rising very sharply in recent years. In 2024, the cost price will be €54, while four years ago it was €45, so that's going very fast. Those fixed costs are really adding up, and they're not going to decrease any time soon, except for feed costs. If anything, costs are likely to increase." And interest rates are also much higher than three or four years ago, Beldman adds.

Dairy farms can, in principle, survive a short period of low milk prices. They can tighten their belts privately, spend less, and postpone investments, perhaps postpone maintenance, but this shouldn't become a permanent fixture. At some point, the bank will have to follow suit. Then you should already consider deferring repayments. But six months should be possible, a year at most. You can hope that dairy farmers also have some kind of buffer for a more difficult period," says Beldman.

He points to 2009 as "a really bad year." "Back then, many dairy farmers said, 'This isn't going to happen to me again, I'll make sure I have a buffer.' But I'm curious to see if they still have that buffer now. The recommended buffer is 5 or 6 cents per kilo of milk. 2016 was also a difficult year, and if you're well-organized financially, you have something to fall back on, but not everyone has that."

Long term positive
What we've seen this year in the French fry market—a sudden surge of cheap competition from abroad, resulting in a decline in demand—is something dairy sector experts don't foresee happening anytime soon. Beldman: "I wonder where that will come from. We don't really see that happening within Europe. It won't happen anytime soon." While it may be an exciting year, the long-term outlook for dairy farming remains positive, according to sector experts. Global demand for dairy products is still rising. Furthermore, several European countries are seeing production stagnate somewhat, which offers prospects for the Netherlands.