Inside Milk
The higher the profit, the lower the milk price
The higher the profit, the lower the payout price of raw milk. This relationship is clearly visible in the annual figures of 25% of the most profitable dairy companies in Germany.
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In the period 2010-2017, the EBIT margin (profit excluding interest and taxes) was inversely proportional to the milk price that the dairy companies Hochland (not to be confused with Hochwald), Zott, FrieslandCampina, Arla and Meggle paid to their members / suppliers.
In the period from 2010 to 2017, this group formed the most profitable quarter of the 18 German dairy companies examined by the German University of Göttingen. On average they scored an EBIT margin of 4,2% annually. Average profitability declined in the period 2010-2017.
Billions of companies not in the worst quarter
The worst-performing quarter of German dairy companies also shows a direct correlation with the level of the milk price paid from 2010 to 2015, but not in 2016 and 2017. This group includes the dairy company Bayernland, Rücker Wismar, Hochwald, Rücker Aurich and Omira.
They achieved an average EBIT margin of 2010% in the period 2017-0,7. None of these companies process billions of liters of milk annually. The North German DMK does that. Germany's largest dairy company scored an average EBIT Margin of 1,5% and thus occupies a middle position in terms of return.
Significant differences in profitability
According to researcher Johannes Meyer from the University of Göttingen, the results show significant differences in profitability between the 18 German dairy companies. This shows how important the strategic positioning of dairy companies is.
"Internationalization strategy, brand policy and product range determine the profit margin. Added value ensures higher profits. Companies that are dependent on the skimmed milk powder market are in the group with the least results," says Meyer. "There are also individual company factors that explain the variation in profitability between the 18 German dairy companies, but they are difficult to explain by comparing figures.
| +25% Unternehmen | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
| Highland | 2,3% | 2,0% | 5,3% | 3,2% | 4,5% | 8,1% | 8,7% | 4,8% | |
| Zotti | 3,8% | 4,2% | 5,7% | 4,0% | 5,4% | 6,6% | 6,2% | 1,4% | |
| FrieslandCampina | 4,8% | 4,2% | 4,7% | 2,7% | 4,3% | 5,1% | 5,1% | 3,7% | |
| Arla | 3,4% | 3,0% | 3,8% | 4,1% | 2,9% | 3,7% | 5,2% | 3,7% | |
| Meggie | 5,0% | 4,1% | 5,3% | 3,9% | 2,1% | 3,1% | 1,8% | 2,6% | |
| Ø | 3,9% | 3,5% | 5,0% | 3,6% | 3,8% | 5,3% | 5,4% | 3,2% | |
| Ø Unternehmen | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| Ehrmann | 1,9% | 1,9% | 3,1% | -0,2% | 2,4% | 7,2% | 6,4% | 3,3% |
| Käserei Mushroom | 2,8% | 2,5% | 4,7% | 3,8% | 3,1% | 3,9% | 3,9% | -0,2% |
| BMI | 3,8% | 3,4% | 2,6% | 2,8% | 1,4% | 1,0% | 3,0% | 0,7% |
| Goldsteig | 1,8% | 2,6% | 2,8% | 2,4% | 2,1% | 1,9% | 1,0% | 2,8% |
| Uelzena | 1,6% | 1,7% | 1,6% | 2,0% | 1,7% | 2,3% | 2,2% | 2,1% |
| DMK | -- | -- | 1,4% | 2,1% | 1,6% | 1,6% | 1,1% | 1,1% |
| ammerland | 1,5% | 1,4% | 1,5% | 1,8% | 1,5% | 0,6% | 0,8% | 1,0% |
| frischli | 0,0% | 1,5% | 0,5% | 3,5% | 3,1% | -0,5% | -1,7% | 1,9% |
| Ø | 1,91% | 2,14% | 2,28% | 2,28% | 2,11% | 2,25% | 2,09% | 1,59% |
| -25% Unternehmen | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| Bayernland | -- | -- | -- | 1,0% | 0,7% | 1,1% | 1,2% | 0,5% |
| Rücker Wismar | 2,8% | 1,2% | 1,3% | 1,5% | -0,8% | -5,2% | 3,7% | 2,1% |
| High forest | 0,5% | 0,5% | 0,5% | 0,8% | 0,9% | 1,0% | 0,9% | 0,8% |
| Rücker Aurich | 0,1% | 0,7% | 0,8% | 1,1% | 0,6% | 0,1% | 1,3% | 0,7% |
| OMIRA | 0,5% | 0,3% | -2,2% | 1,2% | 0,7% | 0,3% | 0,6% | -- |
| Ø | 1,0% | 0,7% | 0,1% | 1,1% | 0,4% | -0,5% | 1,5% | 1,0% |