Trend or coincidence?
Never before have so many members left FrieslandCampina
The number of dairy farms in the Netherlands grew again for the first time since 2009. However, against this trend, the number of member dairy farmers at FrieslandCampina showed a decrease of 4,5%. This brings the number of members down to a number that is almost equal to Arla.
FrieslandCampina in 2016 there were still 13.300 supplying companies, but in 2017 there are still 12.707 of them. It is a decrease of just under 4,5%, which is the largest decrease in the number of supplying companies since 2009. In total, the processor lost 2009 suppliers of milk between 2017 and 2.619.
What is going on?
Natural attrition usually contributes to the decline in the number of members, but this is not the case in 2017. The Central Bureau of Statistics (CBS) even reports that the number of farms with dairy cows has grown from 17.910 to 18.060. At the same time, there are a number of switchers every year, but on average the percentage is around 1,5%. What made so many dairy farmers decide to leave the cooperative in 2017?
37
euro
A first argument is the milk price† In 2016, this (including performance premium and reserves for member bonds) amounted to €30,57 per 100 kilos. In 2015, the milk price (€32,93 per 100 kilos) was only slightly higher. Nevertheless, the average milk price (including 2017) over the last 5 years still amounts to almost €37 per 100 kilos.
Milk price in the middle
This puts FrieslandCampina in the middle bracket† In addition, processors who paid more often have a membership freeze. A-ware has only had its own milk price since the summer of 2016. Thanks to this milk price, the dairy has been among the higher milk prices since 2017.
Because of the picture that the milk prices paint, it can be argued that there is more going on. This is because many dairy farmers would have made the switch to another processor before. A number of dairy farmers are known to have switched on organic and therefore chose a different customer. However, these are not 593.
What's left?
What remains are: the dissatisfied voices about the standstill at the beginning of 2017, the role played by the processor in the plans for phosphate reduction and the focus on ammonia and CO2 reduction. The discussion about the group and tie stables only started after the beginning of October. At that time, members could no longer switch.
What is also striking in this development is that, despite the decrease in members, a measure was taken to boycott extra liters. It is not clear how many liters of milk the members who have left represent, but it is certain that it will prevent an increase in milk supply. Why was a regulation around a milk stop necessary?
FrieslandCampina itself says that the decline really has to do with quitters.
Will trend continue in 2018?
If the trend of 2017 continues, over 2018 another large group of dairy farmers left the cooperative. Not only FrieslandCampina sees members leave, but also at DMK they see members leave. It is not yet known how many members there were in 2017. It is clear that 400 million liters of milk disappeared in the Netherlands and Germany. With a Dutch annual average of 900.000 kilos of milk, this translates to 444 farms.
For DMK state It is clear that January 2019 will be a new deadline, as there is already a harbinger that members are planning to move 1.500 million liters of milk. In 2018, 80% of what the members indicated was moved permanently, which means that the processor still has to work hard to prevent an outflow of milk.
Arla exception
The exception among the large Western European processors of milk turns out Arla† It does succeed in retaining its members and can fall back on a relatively stable member base (approximately 2.700 dairy farmers). Of this number, 55 are located in the Netherlands.
When looking at the processor that is most actively recruiting members, all roads lead to A-ware. Also because various processors first wait to see what the milk supply will do before they start taking on members again.
The number of dairy farmers is increasing, but the number of FrieslandCampina members is decreasing.
Herman van den Pol
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