News Rabobank
Limited growth in milk production for quality marks
The number of Dutch dairy farmers producing milk within a demand-driven chain is growing at a moderate rate, according to an analysis by Rabobank. There is sufficient importance for making dairy production more sustainable, but growth potential depends on several factors.
In the dairy chain, meadow milk and organic dairy are the most well-known forms of demand-driven production. For example, milk processors offer organic, On the way to Planet Proof, and Better for Nature, Cow and Farmer. Distinctive concepts and milk flows can be established, especially on the basis of sustainability. Over the years this has grown more and more and there are more and more programs for dairy farmers to participate in.
However, growth remains limited, as these dairy flows represent approximately 10% to 15% of the total milk volume. This mainly concerns milk that is processed into daily fresh dairy and this represents only just under 10% of the total Dutch milk production.
consumer edition
There is growing willingness among consumers to pay a higher price for dairy products with a sustainability label. Where about 2018% of spending was spent on sustainability certification in 7,8, this grew to 14,3% in 2019, according to figures from Statistics Netherlands.
Dairy farmers would like to take steps
The limited growth is not due to the dairy farmers. Waiting lists for milk flows indicate that there is sufficient need among dairy farmers to participate. The problem mainly lies in the still relatively limited volume of sales. This means that not all dairy farmers can directly participate in concepts. Rabobank sees that more and more dairy farmers are interested in participating in a concept than there is currently room for it.
Staying realistic
Marijn Dekkers, Sector Manager Dairy Farming, emphasizes that it is important to remain realistic. "Despite the growth potential and the benefits for dairy farmers, a large part of Dutch milk production is still valued in the 'standard' way. Nevertheless, the development towards a demand-driven dairy chain is important. The higher margins give the entrepreneur financial strength to invest in sustainability measures such as increasing biodiversity and animal welfare."
Rabobank sees few demand-driven chains appearing for production for export in the short term. After all, there must be a demand for this form of added value and at the moment this seems to be the case mainly with a growing group of consumers and supermarket chains in the Netherlands. Growth potential and the possibility to scale up the volumes are mainly on the shelves of the Dutch supermarket.
Chanti Oussoren
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