Dairy protects farmers from the wind in a revolving market

In Belgium the picture is similar, and the average price paid out fluctuates according to the milk price comparator from Boerenbusiness In recent months, prices have ranged between €53,00 and €54,00 per 100 liters. However, some processors here are responding to market signals a little earlier than in the Netherlands. For example, Laiterie des Ardennes, a company with a strong presence in true commodities, has lowered its latest milk price by over €1,50 per 100 liters. 

Milk prices Belgium
No processor in the Netherlands has yet dared to attempt something similar. The largest reduction so far was by A-ware, which reduced prices by almost 80 cents per 100 kilos for August. Leerdammer, FrieslandCampina, and Cono have all taken much smaller steps back. 

This protects their members and suppliers considerably, as there's a gap of at least €7,00 to €8,00 per 100 kilos between the average price paid to farmers and the average return from dairy products at the commodity level (cheese, powder, butter), according to informal companies. Thanks to longer-term contracts and higher-value specialty products, they can still compensate somewhat, but in reality, they're currently losing a significant amount of milk. 

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The price of the raw material value must be increased by approximately €1,00 per 100 kilos for the Netherlands.

Why do they do this? Processors are very keen to retain their existing members and suppliers. This is essential in the long run in a shrinking sector. Everyone wants to keep their existing members. Ideally, they want to add some more farmers, because quite a few of the existing suppliers and members also close down every year due to a lack of successors, buyouts, and permitting issues.