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Green dairy farms perform better economically
Research by Wageningen Economic Research on behalf of the Sustainable Dairy Chain shows that Dutch dairy farms that work sustainably perform better economically.
De researchers conclude that Dutch dairy farms that score best on the sustainability goals of the Sustainable Dairy Chain also do better economically. Researchers chose dairy farms that performed best on sustainability themes of biodiversity, climate and land-use and compared them with the rest of the dairy farms. This included looking at company characteristics and technical results. The researchers note that although sustainable companies also performed better economically, this does not mean that there is economic perspective for other dairy farms to make their company more sustainable in the future.
Lower costs, higher revenues
At sustainable dairy farms, the costs directly related to milk and crop production are €2,56 per 100 kilos of milk lower than the rest. This is mainly because livestock feed is €2,13 cheaper and manure sales are €0,25 cheaper per 100 kg of milk.. However, milk production per hectare is lower.
Sustainable dairy farms are on average more extensive and produce 150.000 kilos less milk than the rest group. Milk production per hectare averages almost 14.400 kilos, the remaining companies are 3.000 kilos above this. The yields from milk are also higher for sustainable dairy farmers: €3,30 per 100 kilos of milk. About half of this comes from higher milk yields. This can be explained by the fact that farmers are financially rewarded for environmental and/or other sustainability performance. The share of organic companies and companies with the On the way to PlanetProof quality mark appears to be significantly higher in the group of best-performing companies than in the rest group.
The researchers do write that it is important to realize that other dairy farmers who would like to do so would not always be able to simply supply milk for such milk flows. Things such as market demand and the location of the company in the Netherlands can be decisive, they write.
Despite the smaller farm size, the lower costs and higher yields ensure that the income of a sustainable dairy farm is more than 28.500 higher at farm level than the regular farms studied.
Experience and craftsmanship
The more sustainable dairy farms are more often run by dairy farmers between the ages of 45 and 55 and less often by young entrepreneurs. A possible explanation for this is that older dairy farmers have further developed their craftsmanship. This appears to help determine performance in the field of sustainability. Farmers can also increase their craftsmanship through the use of independent advisors or coaches and knowledge programs. According to the researchers, entrepreneurship is also important. It is characteristic of sustainable dairy farmers that they stick to the course that suits them and consistently maintain that course. Long-term goals of dairy processors can help dairy farmers determine a course of action.
Being extensive versus becoming extensive
It seems to be a logical step to expand now. Extensive, sustainable companies have a higher income, the research shows. But being extensive is not the same as becoming extensive. For example, companies with extensive or more extensive business operations have followed a strategy for decades to maintain a certain balance in the ratio of land and animals. As a result, they now have a better starting position given the current social situation.
Other companies have opted for more intensive business operations where relatively more has been invested in production rights, stables and manure processing. Therefore, it may be economically difficult or impossible to extensify. After all, this means more land or fewer animals, which means that not all capacity is used and the fixed costs per kilogram of milk increase.
Max van der Heyden
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