Digital dairy trade takes flight in times of crisis

Sales of dairy products via the digital trading platform DAO.EU took off in the first quarter of 2020. The volatile dairy market, due to the corona crisis, certainly does not hinder this. 

The platform reports a volume growth of no less than 284% to more than 13.500 tons, compared to the same period last year. Gouda cheese was the largest product with almost 4.000 tons of traded volume, closely followed by skimmed milk powder and whey powder. In addition to the increase in trading volume, the number of users on the platform is also increasing.

Volatile Market
According to Richard Klink of DAO.EU, the parties come from all corners of Europe, such as Greece (Skopos), Ireland (Lakeland) and the Netherlands (Melkweg). Not only trading parties, but also the Eucolait recently created a viewing account to monitor the digital dairy trade and to analyze market trends from it.

"Due to an increase in volatility, real-time market information is essential to be able to respond quickly to changing market conditions. Our platform offers the possibility to close a deal with 1 potential counterparties with 83 bid and/or quotation. The speed, the convenience and the confidence in the technology now seems to be paying off.”

World to win
However, Klink does not want to directly link the rapid growth to the corona crisis, as a result of which the volatility in the dairy market has increased significantly. "Our platform does benefit from volatility. So it certainly doesn't work against us, but the growth was already visible before the crisis." Despite the rapid increase in the first quarter, less than one percent of the dairy trade still takes place via the screen. "We still have a world to win in that regard."

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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