Inside Milk
Dairy must develop more locally and globally
The dairy farming and dairy industry in the EU will face a difficult task in the coming years. They need to become more embedded locally and regionally, as well as better able to participate in the international context. One of the consequences is reduced competitiveness.
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In the meantime, they must mainly meet stricter requirements regarding climate and soil. They must emit fewer greenhouse gases and limit nitrogen emissions. This was said by Roel Jongeneel on Friday (October 1), researcher at Wageningen University, at a conference of the European dairy umbrella organization EDA in Brussels.
Dairy production down
According to Jongeneel, it is not yet possible to say what exactly this will mean for dairy farming and the dairy sector in various parts of Europe. It is clear that production will decline. According to a calculation made by the European Joint Research Centers (JRC) of the Farm-to-Fork strategy, dairy production will decrease by 12%. This also makes it more difficult to compete on the global market. However, it has been calculated that average dairy prices will rise by 17%. According to the German Institute for Ernährungswirtschaft, they even increase by 36%.
Whether that will actually happen remains to be seen, Jongeneel indicated. It is also important where the strongest changes will take place in dairy farming and dairy. Who benefits and who mainly suffers harm? Are these the producers and processors in the current concentration areas - which also cause the most emissions - or their colleagues elsewhere?
Much fewer companies
It is clear that the changes are accompanied by a sharp reduction in the number of agricultural dairy farms. Their numbers in European dairy farming have fallen by an average of 6% in recent years. While the average number of cows only decreased by about 2% and milk production increased by about 1,5% per year. The latter trend is therefore reversed by the Farm-to-Fork strategy, the other two trends are not.
Opportunities for small processors
In the dairy industry, meanwhile, smaller processors are expected to benefit from the changes, as will the large dairy companies with a strong and varied brand portfolio. The large processors with a narrower product package and fewer brands will have a harder time.