Members crack FrieslandCampina's milk money plan

FrieslandCampina's proposal to amend the milk-money regulations has not gone down well with some of the members. Critical comments are made in a letter that was submitted to a meeting in Winterswijk last night. Questions are also raised about the collaboration with the World Wildlife Fund (WWF) and Natuurmonumenten. 

FrieslandCampina recently presented the plan to milk money regulations from 2020 to be adjusted for 3 years. This proposal contains a number of changes. For example, the cooperative wants to remove double premiums (for vlog, sustainability and grazing) of the reference companies from the guaranteed price.  

First of all, the letter signed by 50 dairy farmers asks why district meetings were organized this spring, at which members could respond to the mindsets of the time. According to the dairy farmers, nothing was done with their critical questions and comments. In addition, it does not appear from the proposal that the guaranteed price should encourage FrieslandCampina to keep dairy prices as high as possible, because they will fall by approximately one cent. 

Reference companies and standard levels
The letter also asks why the milk price of DOC Kaas (in the basket of the reference companies) has been replaced by Vreugdenhil. And why Cono's weighting has been reduced from 8% to 5%. This reduces the influence of cheese and increases the influence of powders. The dairy farmers would like to see the impact of this calculated over a period of three years. This is because the price of skimmed milk powder was under heavy pressure during that period due to the intervention stocks.

There is also surprise why the standard levels are being adjusted to the actual levels for 2019. The members say that it was promised in an earlier meeting that this adjustment will not affect an individual company. Now, according to them, there appears to be (albeit limited). The letter suggests that this will save the company €7 million.

Members expect the proposal to lead to higher profits. They want to know what this does to the tax burden and the performance premium. They also wonder whether any book losses of at least €100 million will be excluded from the profit sharing. In the proposal FrieslandCampina wants to be able to invest such book profits directly.

Cooperation WWF and Natuurmonumenten
Finally, the collaboration between FrieslandCampina with the World Wildlife Fund (WWF) and Natuurmonumenten is also criticized. The dairy farmers are concerned that the dairy cooperative is working with an organization that endorses the nitrogen advice of the Remkes committee. "You don't need enemies with friends like that," the letter reads. The members therefore want to know what the collaboration costs and what it yields. On that basis, they want to reconsider the collaboration.

At the meeting in Winterswijk, further comments were made about the appointment of Hester Maij as the new director of public & quality affairs. This cannot be read in the letter, but is indicated by sources Boerenbusiness confirmed. Some members are upset that Maij, in her time as provincial administrator, was involved in the expropriation of 2016 hectares of agricultural land in Overijssel in 400. 

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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