Dutch dairy hunts for Belgian milk

The Belgian dairy market has been shaken up considerably with the arrival of Dutch private processors. First came Farmel. At the end of 2020, A-ware also presented itself when the company took over the milk powder activities of FrieslandCampina in Aalter. They are now the second largest milk processor in Flanders and the hunger for milk has not yet been quenched. Now Vreugdenhil is also joining the fray. This terminology sounds a bit heavy, but it is not exaggerated. A spokesperson for Milcobel recently said in ZuivelZicht: 'A war for milk is gradually brewing'. These clever words reveal that the game is played hard.

Exodus at Milcobel
The Belgian dairy cooperative could rest on its laurels for a long time, but those times are over. Milcobel has experienced an exodus of members in recent years. The milk price was far below par. In addition, many members denounced the company's arrogance, although a different course has since been taken. The exodus was so great that Milcobel came up with an expulsion ban. Painful lawsuits followed. A-ware in particular profited gratefully from the collective dissatisfaction and contracted hundreds of dairy farmers.

The fact that Vreugdenhil is now also looking for milk across the border indicates that the apples hang less loosely on the tree in our own country. In recent years, many dairy farmers changed processors, but the number of changes is stagnating. Vreugdenhil welcomed more than 100 new suppliers, accounting for 140 million kilos of extra supply every year. Quite a bit of milk on the side, but Vreugdenhil wants more and is therefore now also focusing on Belgium. It's a logical strategy. Many dairy companies are concerned about the high number of quitters in Dutch dairy farming, due to the aging population and the nitrogen policy. This threatens to lead to an overcapacity of stainless steel in the factories.

The move to Belgium is daring, but perhaps Vreugdenhil is a bit late. After all, many dairy farmers have already made a choice in the past two years and entrepreneurs will probably not continue to switch. However, the powder producer is confident. They do call the plan challenging. With what they say is a good milk price, the company believes it can convince Belgian dairy farmers. This argument certainly makes sense. The times when intervention powder stocks depressed milk prices are long gone. In the Netherlands, Vreugdenhil has been at the top of the list for quite some time basic milk price comparator. The milk price for Belgian suppliers will be more or less the same as in the Netherlands, Vreugdenhil stated when asked. 

Tough Competition
The milk price is of course a major factor in the choice of a processor. Belgian dairy farmers also appear to be less chauvinistic than you might expect. This is evident from the huge influx of A-ware, which until recently was an unknown player for our southern neighbors. That A-ware Belgium now also in Southwest Netherlands going to recruit, however, is a signal that growth in Belgium is stagnating. Vreugdenhil will probably have to work hard to unleash dairy farmers. Especially because Milcobel's milk price is competitive again. The ambitions are also great, in the course of 2024 Vreugdenhil hopes to have contracted 100 million kilos of milk. That amounts to at least 80 new suppliers. 

In the background, FrieslandCampina is also still working on welcoming new suppliers in Belgium, just like in Germany, by the way. In its search for milk, the dairy cooperative also explicitly searches neighboring countries. Where Vreugdenhil is limited to the province of Antwerp, FrieslandCampina looks around the whole of Flanders. To give new members an extra chance, the membership fee for new members has been reduced. No deposit is required with private processors. On paper, that's an advantage.

Incidentally, it is not only Dutch processors who prey on dairy farmers in Belgium. The established order of Belgian dairy is also open to additional supplies. After all, Milcobel saw many members leave and can use new recruits. Laiterie des Ardennes (LDA) recently opened a new factory and Arla is not unsympathetic either. In other words, the choice is huge. In Belgium, the milk price will be scrutinized more than ever now that the interplay of forces is intensifying.