Does Strange Labor Divide Dairy Farming?

"We stand up for family businesses," said the voice on Thursday, October 26, on the square in front of the European Commission (EC) building. The European Milk Board (EMB) argued a symbolic action, after the current production cost figures, calculated by the EMB, showed a frightening picture.

How high are the production costs?
Belgium, Germany, Denmark, France and the Netherlands together managed to produce 2016% of the European milk pool in 53. These are also the countries in which the costs of producing milk are relatively high. For example, the EMB calculated a cost price of €0,4266 per kilo for the Netherlands, a price of €0,4117 per kilo for Germany and the Belgian livestock farmer gets away with a price of €0,4137 per kilo.

The Danish livestock farmer is still doing reasonably well at €0,3977 per kilo and the cost price for the French livestock farmer is €0,4102 per kilo. It should be noted that these are averages. For example, Germany and France have so-called 'mountain farmers' and costs are higher in smaller countries due to regulatory pressure from environmental issues.

The positive news is that production costs fell in both France and Germany. In France with 2,9% in Germany with 2,3%. They are stable in Denmark. The Netherlands recorded a plus of 0,5% and Belgium a plus of 1,9%.

Buffer needed
Dairy farmers were short of money in both the 2012/2013 and 2015/2016 periods. This is the reason for the banks to call for the creation of a financial buffer. In addition, Dutch livestock farmers are more heavily financed compared to their Belgian colleagues.

It is also the reason that dairy farmers today, despite a strong milk price, little investment. Rabobank let us know. The uncertainty surrounding phosphate also plays a role in the Dutch scenario. The results will be announced on October 31 the appeal, but accountants are already warning livestock farmers not to count themselves rich if they win. This is because when the system is introduced have to go back in numbers. This decline is the result of the limited regulations for phosphate rights.

To reduce costs, many German dairy farmers switched to using Eastern European personnel. This is not yet common in the Netherlands. For many dairy farmers, the use of foreign personnel was precisely the limit to growth. 

Largest percentage of family businesses in Belgium
The EMB figures support this. When looking at the annual work units (AWU), the Netherlands has an average of 1,81. When only looking at companies that perform the work with the help of family, the figure is 1,54. In neighboring Belgium, these numbers amount to 1,79 (all work) and 1,75 (family). This means that the largest percentage of family businesses can be found in Belgium. In Denmark this is the lowest in percentage terms.

When looking at the development in the Netherlands, it appears that a group of entrepreneurs is emerging who uses foreign labor, compared to a group that shrinks from using it. This means that dairy farming is starting to look more like pig farming, filled with very large and very small players. Is it land-based versus intensive, or is it already entrepreneur versus family business?