Introducing Growth Appointment
FrieslandCampina limits growth of milk lake
FrieslandCampina announces its intention to curb the growth of the milk lake. To be able to do that, the growth agreement is introduced. That agreement is based on market growth. More production than agreed means a deduction from the milk money. The decision-making process is yet to take place.
FrieslandCampina announces its intention to focus on a more market-oriented growth of the milk supply. This will be done in the future through a growth agreement. "More milk production than market growth leads to a deduction from the milk money of 10 euro cents per kilo." With this decision, the dairy company is bringing the payment of the extra milk more in line with the market growth of the basic dairy products. The basis of the milk price remains the guaranteed price.
"The member dairy farmers will receive a letter today with the explanation and reference", says Jan-Willem ter Avest, spokesperson at FrieslandCampina. He explains that the system is slightly more complex than stated in the press release. For example, an estimate is made every year of the market demand. After that, the growth of the total milk production at FrieslandCampina is examined. Only when this exceeds the market demand, milk money is withheld. This then only happens to dairy farmers who produce more than their reference allows.
5 references
"In this way we prevent dairy farmers from growing at the expense of other dairy farmers," emphasizes Ter Avest. The options that dairy farmers can choose from are the reference April 17, 2016 to April 16, 2017, the average from April 17, 2015 to April 6, 2018, calendar year 2017 and April 17, 2017 to April 16, 2018. One last option for Dutch dairy farmers, the phosphate rights obtained or registered with RVO before 16 April 2018, 16:00 PM, are converted into a comparison volume. The cooperative chooses the highest volume from the first 4 options. It will later become known how dairy farmers can opt for the option of translating phosphate into milk.
This proposal is not entirely unexpected, because in 2017 Frans Keurentjes, chairman of the Zuivelcoöperatie FrieslandCampina already indicated that growth must take place in conjunction with processing and market demand.
In addition to the limitation on extra liters of milk, the largest processor in the Netherlands is also introducing a new milk flow. This will be the certified Top Dairy line. A line that incorporates the new standard for soil-boundness and that meets all the requirements in the field of grazing. "Leading member dairy farmers who are committed to sustainable and special milk flows receive a higher reward." Animal welfare, nature and climate also play an important role in this milk flow. The first products are expected in 2019.
An early prognosis shows that 10% to 15% already meet the requirements for the new milk flow. This will be a supplement to organic milk, vlog certified milk, landliebe, North Holland milk and the other streams of the processor. In addition, efforts are also being made to expand the existing flows.
Decision on proposal at the end of 2018
The proposals still have to pass the member dairy farmers and the decision-making still has to take place. The proposals will be discussed with the member dairy farmers in the coming months. When the decision-making is complete, the proposals will be introduced from 1 January 2019.
Herman van den Pol
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