Less manure also means less milk, but how much?

In 2025, the supply threatens to drop to 12 or even 11 billion kilos. This depends on the precise manure shrinkage, because many factors are not yet known. Since 2008, dairy farming has not fallen below that figure. The cause of the decline is the mandatory reduction in manure production.

Production and earning capacity
If BBB Minister of Agriculture Femke Wiersma does her best for livestock farming, the damage to dairy farming may not be too bad. However, if she continues to act as she is doing now, the darkest of the scenarios outlined above will come true.

Of course, this is not just about the milk supply, but also about the earning capacity of dairy farmers; under which circumstances, for example, production continues. Even with a lower milk supply, the pressure on the manure market remains and a large part of the income of dairy farmers continues to flow away to the costs of manure disposal. This puts extra pressure on the milk price in the coming years. 

Chain restructuring
The lower milk supply will also necessitate further reorganisation and restructuring in the dairy chain. FrieslandCampina has been most busy with this in recent years. november the company announced that it will close two more factories: one in Born, Limburg, the other in Leeuwarden, where half of the enormous factory site will be sold off in the coming years. This will leave sixteen production locations in the Netherlands, but in parts of the country it will be a long(er) way from the farm to the factory. It will also be more difficult to keep the production lines well occupied at the other eleven larger processors of cow's milk in the Netherlands. 

Domino effect
The decline in milk production and the disappearance of dairy farms not only leads directly to the closure of factories, but also indirectly puts pressure on occupancy. A domino effect is created and more factories have to close. This is because processors have made full use of each other's capacity in recent years. A fair amount of contract production was and is being carried out on both sides. This will also decrease with a declining milk production and this will jeopardize the critical cost price. 

Import also more difficult
The supply gap that the Dutch dairy farming sector is leaving behind cannot simply be filled by purchasing milk from abroad. Milk production is also under pressure in neighbouring countries. Not as bad as in the Netherlands, but the European agricultural policy of recent years has also resulted in lower production in other EU countries.
It should therefore come as no surprise if more dairy factory closures are announced in the Netherlands in the coming year. In fact, it is quite logical that even more factories will close. Who and where, that depends on the policy and the position of the various companies. Mergers and acquisitions are certainly not to be ruled out in this field of forces.