News Global Dairy Farmers
'Being financially healthy is not enough'
It is no longer enough to be financially healthy. This is reason for FrieslandCampina to want to become a leader in the field of sustainability with balanced growth. Why does the pressure to do more seem greater? Is it the consumer who wants more, or is there something else going on? What is the situation in Brazil? The topic was tackled at the Global Dairy Farmers (GDF) conference.
French Approvals, chairman of the FrieslandCampina cooperative, states that we do not live in an era of change, but in a change of time. "Maximum production with standard qualifications is no longer possible. Being financially healthy is no longer sufficient to be able to produce."
Excellent results
Keurentjes cites the mink sector in this regard. It is part of the agricultural sector with excellent results, but they will eventually disappear from the Netherlands. It is the cooperative's argument for wanting to become a leader in the field of sustainability with balanced growth.
De balanced growth is necessary to ensure that enough money remains available; for example, the processor saw 2012% more member milk go to products with added value between 2017 and 10, but the volume in the less profitable part increased by 65%. As a result, more than 25% of the milk is lost. This was previously less than 20%.
65
percent
The increasing competition and investment demand money, and that is something that cannot be easily combined with the losses. This is the reason for opting for a levy on the excess milk supplied. Not only do these challenges exist, but there are also questions from the consumer side. They increase as wealth increases.
Critical consumer
Mary Ledman, international dairy analyst at Rabobank, argues that the critical consumer has a stronger presence in locations where the agricultural sector receives a lot of money from the government. Which is the case in Europe through the Common Agricultural Policy (CAP). "The same discussion is taking place in New Zealand, but there the agricultural sector plays an important role for the economy and even determines the value of the currency."
Yet it does not stop at these countries, because in Brazil this is just as good. "They aim for the same thing: grazing, animal welfare, et cetera," said a dairy farmer with a division in Brazil. “Even in the United States, this is playing out,” Ledman says. She cites the example of a company with 2.000 animals that did not want to participate in anything. "Now there are 50.000 animals and they do talk about these topics. A good player has no problem explaining."
Stone in the pond
It indicates that climate and sustainability issues are an international issue. Approvals believes that the Paris climate agreement has been the proverbial stone in the pond. Companies such as DSM, Danone, Nestlé and other large parties have picked up on this, making it an important topic. "In the B2B segment, premiums are paid for sustainability."
With the 'Topline Dairy' FrieslandCampina jumps into the gap, in order to compete with parties such as Perfect Day. It's about what someone expects from a meal. However, it is also stated that the extra requirements that are now being imposed on milk may soon become mainstream, which means an end to the premium.
Herman van den Pol
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