Large German dairy is looking for Dutch milk

Fude+Serrahn, one of the largest dairy players in Germany, is looking for Dutch dairy farmers as a supplier. In doing so, they want to anticipate the shrinking milk lake in Northwestern Europe and thus the focus is also shifting to our country. Dairy farmers Arnold van Dorp (45) and Peter Steenwijk (49) represent the company in the search for Dutch milk. "It can be very interesting to work with this German party."

The plans are surprising, but also a writing on the wall. In Germany too, the realization is starting to dawn that the milk lake in Northwestern Europe could well shrink considerably in the coming years. This is due to stopping dairy farmers and increasingly strict environmental standards. Dutch processors have also recently started proactively looking for new suppliers. From FrieslandCampina to Farmel and almost everything in between. The fact that a German party is now also entering the Dutch market gives a new dimension to this interplay of forces.

Dairy farmer Arnold van Dorp from Hazerswoude in South Holland has been supplying Fude+Serrahn since February last year. For this, the milk went to Vreugdenhil, but he was looking for more entrepreneurial freedom. That's what Van Dorp thought in Germany. An atypical choice at first sight, but he really likes it. At Fude+Serrahn, the Dutch milk tastes like more. Together with Dutchman Peter Steenwijk, who milks about 2.000 cows in East Germany and also supplies Fude+Serrahn, they asked Van Dorp to look for more Dutch milk. The Dutch have been deliberately chosen for this, because they understand the language of the Dutch farmer better, literally and figuratively. Dairy farmers from all over the Netherlands are welcome. The supply will initially be destined for the subsidiary Wiegert Milch, which has factories in Velen and Heiden, both a stone's throw from the border at Winterswijk. The factories have recently been registered with the COKZ regulator.

"Fude+Serrahn wants to anticipate growing dairy sales, but at the same time the milk supply in Germany is shrinking," says Steenwijk, who has been a supplier for years. "They have good experience with Dutch dairy farmers in Germany who are often their suppliers." According to Steenwijk, it is an open and transparent family business with a direct approach. "In that respect, they are typically un-German, where communication is often quite formal," adds Van Dorp. Everything is tightly and efficiently organized in the factories. There is no employee too many, Steenwijk knows. "Ultimately, that benefits the milk price."

Tell us more about Fude+Serrahn, what kind of company is it?
Steenwijk: "It is a merged company, which originated from the Fude and Serrahn families. 10% of the shares are still in the hands of the dairy cooperative DMK. They are solid Germans. Man a man, word a word. They now have about 600 suppliers, including many large dairy companies in East Germany with a few thousand cows. The milk is processed into butter, cheese, milk powder and fresh dairy. So a fairly broad portfolio. The company is also large in the dairy trade. They are the largest butter trader of Germany. At Fude+Serrahn they leave their dairy farmers alone. Trust instead of mistrust, so to speak. Although the company is not a cooperative, I experience a strong 'we-feeling'. It can be very interesting for Dutch dairy farmers to use these German party to go into business."

A decent German buyer sounds nice, but in the end it's all about the milk price. What's up with that?
Van Dorp: "As a supplier you have three options to choose from, based on 4% fat. The first option is the average of the monthly payment prices in North Rhine-Westphalia. This includes the milk prices of FrieslandCampina, Arla, Hochwald and DMK. The highest and lowest milk price are excluded from the calculation and then the average milk price is paid out. The second option is a payment price based on the weekly spot milk price."

"And the third option is a spot milk price that is fixed for four weeks based on the value of skimmed milk powder and butter, determined by AMI. With each option, the payment takes place every two weeks. With the freedom of choice, I again feel that I am an entrepreneur. I myself am paid on the weekly spot milk price and I was fine with that."

Steenwijk adds: "You can also receive premiums for quality, quantity, grazing and vlog. The latter is not a requirement, as this is sometimes seen as the standard in Germany. Personally, I am enthusiastic about the spot milk price in the coming years. Due to the expected shrinkage of the milk pool, spot milk prices could well be structurally above the payout prices."

Exporting quickly sounds complicated for an individual farmer, with VAT and the like. How about that?
Van Dorp: "It does sound like that, but it isn't. The 0% rate is applied based on the ICP declaration. It actually means nothing. The rest of the collection procedure is the same as we are used to in the Netherlands The samples go to Qlip and the RMO regularly drives up. I initially saw bears on the road at this point, but that turned out to be wrong."

In the coming months, Van Dorp and Steenwijk will be tasked with making Dutch dairy farmers enthusiastic about Fude+Serrahn. Or the apples hanging loose on the tree? "Perhaps it would have been easier a year or so ago when many dairy farmers were out of place and often switched buyers. At the moment, payment prices in the Netherlands are high and suppliers are being pulled from all sides. That there is now a German "Against a new party, it brings even more market forces with it. Moreover, the German interest in Dutch milk is clearly a signal function of the approaching scarcity. At Fude+Serrahn they dare to acknowledge this openly and offer good conditions for dairy farmers who are looking for perspective and entrepreneurial freedom." , said Van Dorp. Steenwijk: "At Fude+Serrahn they are also enthusiastic about the quality of Dutch milk. It is usually top notch with higher contents than we are used to in Germany. They are interested in that. It can lead to a nice win-win situation."

The search for new Dutch suppliers will probably be pioneering, both men expect. They do not have a target number, but they believe an influx of one hundred dairy farmers should certainly be possible.

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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