News Annual figures 2023
DMK promises improvement after a sharp drop in milk prices
The German dairy cooperative DMK is certainly not satisfied with the milk money paid to its members in 2023, CEO Ingo Müller said during the presentation of the annual figures. Turnover remained virtually the same as the year before, but profits fell considerably. Equity has improved somewhat.
DMK achieved a net profit of €5,5 million last year from a turnover of €13,2 billion. This is just €10 million less than the year before. To say the least, the dairy giant is not happy with the result, nor with the milk price of an average of €41,50 per 100 kilos (at 4,2% fat and 3,4% protein). DMK therefore performs less than the competition, as the dairy group itself concludes. A year earlier, DMK was able to present an above-average milk price.
The cause of the decline is referred to extreme market disruptions that affected the dairy sector in 2023. As a result, significant inventories had to be written down, especially cheese. Due to a drop in demand, more milk had to be powdered, which resulted in lower valorization of the milk. The energy crisis also affected the result. One bright spot is that the solvency ratio has improved somewhat to 34,7%.
Factories close
In addition to external causes, CEO Ingo Müller also takes matters into his own hands. "You grow and learn from challenges, no matter how painful they sometimes are." In the meantime, the company has started a reorganization, closing or downscaling four factories. The focus is shifted to dairy products with added value. In concrete terms, this means that DMK mainly wants to move away from powder production, although this is not stated in so many words.
The disappointing results in 2023 have consequences for DMK's membership base. About five hundred farmer members have canceled their membership or are threatening to do so, according to German media. This would allow DMK to lose 700 million to possibly even 1 billion kilos of milk. In 2023, DMK processed 5,5 billion kilos of milk.
The tense dairy markets have now normalized, DMK reports. A more stable milk price is therefore expected this year than last year.
Wouter Job
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