Background Milk
Government is chasing dairy and dairy sector at high costs
The dairy farming sector and also the dairy industry are faced with enormous annual cost increases due to the accumulation of government policies. The loss of the derogation alone costs an average dairy farm between €23.000 and €28.000, with peaks reaching almost €50.000 for intensive farms.
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This is stated a fact sheet of ZuivelNL, which was discussed this week by the organization's board. The costs of other measures have not yet been included. "Because much of the proposed policy has not yet been sufficiently developed, the economic consequences cannot yet be mapped out exactly. There is still a lot of uncertainty for dairy farmers," says Hubert Andela, director of ZuivelNL.
ZuivelNL's note and fact sheet are based on an exploration that the Association of Accountants and Tax Consultancies (VLB) carried out on behalf of LTO into the impact of themes such as derogation and land ties.
4,2 billion kilos less milk
If the government's idea of a 30% reduction in the dairy herd continues, the current milk supply will decrease by approximately 4,2 billion kilos. This means that the dairy industry will have to make significant adjustments. The assumption is that this supply loss can be compensated for approximately half by more imports of raw milk, which will dampen the contraction in processing to 15%.
Milk from neighboring countries
From an international perspective, the Dutch dairy industry works relatively efficiently and is able to achieve high milk valorisation. This could ensure that the processing capacity released will be partly filled with milk from neighboring countries. However, the assumed decrease in the Dutch milk supply assumes a stable milk yield development per cow. With extensification, this milk yield could also very well decrease, which could result in additional shrinkage.