Boerenbusiness is 10 years old this year. As part of this anniversary, we look back at the developments in this decade. Today a look at the milk supply. The Central Bureau of Statistics publishes RVO figures on Dutch milk supply and processing. What developments have taken place here?
The past decade has been a bumpy road for the dairy industry. The release of the milk quota in 2015 is one of the most important milestones in this regard, followed by the introduction of phosphate legislation and the problems surrounding the nitrogen dossier. Since 2006, efforts have already been made to abolish the milk quota by extending the milk quota. In those 9 years, production was increased by 18%, where in the previous decade it was a fairly constant supply of an average of 10,6 billion kilos per year.
2010 breaks records
Dairy farmers deliver about 96% of their milk to dairies. In the 2010/2011 season this meant a supply of 11,6 billion kilos of milk, milked at the time of the milk quota. The month of May is traditionally a peak month when it comes to milk supply, but in 2010 it broke all records as a result of the easing. In May 2010, Dutch dairy farmers supplied more than 1 billion kilograms of milk. That is the largest supply to dairies since the start of the measurement in January 1995.
2010 also went down as a record year for cheese production. Between 1995 and 2010, cheese production increased by more than 9% to 753 thousand tons. About 55 percent of all milk supplied to factories by dairy farms is used for making cheese.
Taking the brake off the sector
After 31 years, the milk quota disappeared on 1 April 2015. In the sector this end of an era is also called 'Liberation Day'. The brakes were released and milk production increased. There was considerable milking. In the first year of the free market, dairy farmers supplied almost 7% more milk to dairies with a total of 13,3 billion kilos.
Although the quota was only taken off in April, the figures for the first half of 2015 already showed a significant increase. In those first 6 months, 6,5 billion kilograms of cow's milk was supplied to dairies in the Netherlands. That is more than the combined annual production (of 2014) of the ten least producing EU countries, according to Statistics Netherlands. Dairy farmers achieved this by keeping more cows and keeping them longer. The cattle herd will grow by 2015 thousand more dairy and calf cows in 55 than one year previously. Also in the same period 35 thousand more calves and heifers were kept to replace the dairy cows.
All this had an effect on the milk price, which fell due to stagnating demand and an increasing supply of milk (products) on the world market, especially from New Zealand. On average, the milk price in 2015 was 22 percent below the level of the previous year. The increased production in combination with lower yields made this liberation year a damper for the milk sector. The annual turnover of the sector decreased by 14 percent in this period as a result of the low milk prices.
There was also a lot of milking in 2016, a record amount of 14,3 billion kilos of milk was supplied to the dairies. The increased supply also meant that the price decrease that started in 2015 continued in 2016. The average decrease was 7 percent compared to 2015. Nevertheless, the total annual turnover of the dairy sector remained virtually the same with a decrease of 0,5 percent. In the course of 2016 the milk price recovered and that recovery continued in 2017.
End of growth
The abolition of the milk quota meant that the dairy herd showed a strong growth, as it turned out in 2017. The production ceiling for phosphate was exceeded, so that the phosphate reduction plan from The Hague came into effect on 1 January 2017 by the Dutch dairy farm. Further growth of the dairy herd was stopped and non-land-based farms had to get rid of dairy cattle. That came down to the reduction of dairy cows to the number of registered cattle on July 2, 2015, minus 4 percent
Three months after the introduction of the scheme, the figures from the Agricultural Census of 3 April 1 show that the number of dairy cows has fallen by more than 2017 thousand, the number of female young stock by approximately 50 thousand. This resulted in a small correction on the milk supply. Milk production decreased by 120 percent on average up to and including the third quarter of 2017. The recovery of milk prices continued. Due to the rising milk prices, the turnover of the dairy sector increased by an average of 0,7 percent in this period compared to the previous year.
In 2018, the milk supply showed a sharp drop for the first time in years. The effect of the phosphate legislation in combination with a very dry summer took its toll. After the introduction of the phosphate rights system on 1 January 2018, the size of the dairy herd has fallen sharply. Between 1 January and 31 December 2018, the number of dairy cows decreased by 60.000 head, a decrease of 4%, according to Statistics Netherlands. The number of calves, heifers and heifers fell by more than 150 thousand in that period, a decrease of 14 percent. All in all, milk production was 3% lower at 3,88 billion kilos of milk.
2020, optimization in livestock
At the end of a decade, confronted with new legislation, dairy farmers are optimizing. In order to make the best possible use of the phosphate space and to achieve the highest possible milk production, the focus is mainly on keeping dairy cows. This is clearly reflected in the figures from the CBS, the number of dairy cows shows a decrease of 2020% in the first quarter of 2 to 33.000 animals. The decline in young stock is significant, a decrease of 10% to 100.000 animals.
In 2019, the milk supply amounted to 13,8 billion kilos, a decrease compared to 13,9 billion kilos in 2018. Milk production will increase again in 2020. Until May, 5,976 million tons were produced in the Netherlands. That is significantly more than in the first five months of last year, when 5,82 million tons of milk were produced in the first five months of the year.
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