Dairy polishes silverware for scarce farmer

The dairy industry is therefore facing quite a challenge. The previous government's buy-out schemes may have attracted mainly pig farmers, but also several hundred, mainly larger and more modern dairy farms, with a considerable volume of milk. On top of the loss of these companies, there are new bloodlettings. A continued buy-out of companies, as the Lower House wants, will not have much effect in itself, it is expected. In combination with the forced reduction of manure production, many dairy farmers are expected to throw in the towel. That could cost 10% to 15% of milk.

No one remains unscathed
Such a loss of milk cannot remain without consequences for the processing industry, not even if the import of milk from Belgium and Germany is increased. It is therefore logical to expect that more locations will close. But who? No one seems to be coming out of the battle completely unscathed.

For the country's largest processor FrieslandCampina, it is especially important to maintain sufficient critical mass, whether or not that is 9 or 8,5 billion kilos of milk per year. The dairy cooperative has a number of challenges to face, especially because the cooperative also has a number of older and smaller member companies and the shrinkage will be felt particularly hard by the intensive companies in the south and east of the country, it is expected.

Tons of benefits
However, FrieslandCampina has a strong trump card in its hands with the guaranteed price and is further strengthening the power of the milk money with the introduction of the 'integral milk price'. This is mainly intended to take a number of arguments out of the hands of competitors with many allowances. FrieslandCampina wants to demonstrate with these actions that it can also provide additional payments and perform more stably again. But the entrance fees are still a major hurdle.

However, the company is now going out to the farmers with extensive calculations to demonstrate how many tens of thousands and even hundreds of thousands of euros dairy farmers would have been better off if they had stayed with FrieslandCampina over the past ten years.

Plus flows open
Biggest competitor Royal A-ware is introducing an adjustment to the premium system for the new year, which will strengthen the milk money package. The company is also reopening access to the Better for milk flow and the Cow Conscious flow. The company does not mention any numbers, but states that they have also acquired new suppliers in the past year and that more will be added at the beginning of 2025. However, there will also be quitters at A-ware.

'Low carbon' and high five-year average
Vreugdenhil Dairy Foods has been working on expanding its sustainability program in recent years and has set up a scheme in collaboration with Nestlé to stimulate investments in this. Starting in the new year, there will be a new incentive scheme for 'low carbon farming', in which dairy farmers can also earn up to €5 extra per 100 kilos. Incidentally, Vreugdenhil Dairy Foods has not done badly in recent years in terms of payment, although it did not have any real top segment bonuses at the time. Over the past five years, the company did pay the highest average bare milk price and pasture milk price.

DOC Kaas will not be introducing a completely new milk money package next year, but this year it will introduce a top segment allowance based on the example of PlanetProof and Beter voor. At DOC this is called the Tuurlijk program, in collaboration with Jumbo. There was a lot of interest, but there is still room, reports DOC. DOC will also start a new 'Haltungsstufe program' for the German market on January 1, which is similar to Koe Bewust by A-ware. There is also room for new entrants.

At Lactalis Leerdammer and Hochwald Foods, not many changes seem to be expected. Lactalis Leerdammer has lost quite a few members in recent years and is now trying to retain suppliers and gain them with high surcharges for extra large volumes of milk. Coöperatie DeltaMilk has its own niche, with some of the members also benefiting from participation in the Beter voor program of Albert Heijn and A-ware.

Waiting list gone, door open
Cooperative Cono will expand the existing Caring Dairy program at the beginning of 2025 and increase the premium for this by €1,50 to a maximum of €6,00 ​​per 100 kilos. Earlier this year, Cono decided to set the entrance fee to zero, because there is no longer a waiting list. With these measures, the North Holland/Overijssel cooperative is trying to regain its position. In recent years, it could no longer consistently pay the highest milk price because the market position of its own Cono brands weakened compared to private labels. There is some recovery, but Cono has not yet fully fought back. For years, Cono did not lose any members, but that seems to be changing.

Finally, FrieslandCampina's biggest competitor Arla will not change much as of the new year. The Scandinavian cooperative has adjusted the milk price structure in the course of this year, with extra rewards for sustainability and climate. In terms of payment for milk money, Arla seems to be an inconspicuous player, but one that is doing well and also pays a supplementary payment every year that really ticks through.