Extraordinary performance in Dutch dairy exports

If we look at a package of the most important dairy raw materials in exports (skimmed milk powder (SMP), whole milk powder (VMP), butter, cheese, whey (derivatives) and lactose), the entire EU (excl. NL) amounts to -11.86% in the first quarter of 2022. The Netherlands comes to -3.21%. For comparison: Germany comes to -6.62% and France to -13,77%. If we look at China, the largest import market for dairy, these effects are still stronger.

Calculated in milk equivalents, the decline in Chinese dairy imports was -12.7% (April year-on-year) or -1.05 billion kilos. This decline can be attributed to the rest of the world (-54,7%), the European Union excluding the Netherlands (-44%) and at worst -1.29% for the Netherlands. In total, Dutch exports to China fell by -3.83%, or 13.6 million kilos. Under certain circumstances this can be called low, but in any other context it is quite a puddle of milk.

Strong increase in cream exports
What is particularly striking is the sharp increase in Dutch exports of I/F (baby food), while all Chinese imports decreased by 5.6%. There was also an exceptionally strong increase in cream exports, while total Chinese imports fell by 1.3%. Cheese, although with a relatively low volume, increased sharply by 35% with a total lagging import in China of -15%. All this in light of clearly higher milk prices in the Netherlands compared to the rest of the EU. From January to April, the average milk price in the EU was €44,22 per 100 kilos and in the Netherlands it was 7.4% higher at €47,50 per 100 kilos. Price is apparently not the most important factor in exports, although that often seems otherwise.

Although the Netherlands is clearly making progress in terms of sustainability - see also the many different types of milk - it hardly distinguishes itself in a positive sense from other EU countries. Moreover, the number of customers at export destinations who impose sustainability requirements on the milk products they purchase can be counted on the fingers of one hand. Perhaps the relative success can partly be found in matters such as cost advantages due to scale, although it should immediately be added that several companies are active in other EU countries that are as large or larger than the largest Dutch processor.

Dutch dairy tradition easy to measure
Then you quickly arrive at matters that are less easy to measure, such as the Dutch dairy tradition, the decades-old, traditional export flows, product quality and its reputation in export destinations, marketing, and the Dutch infrastructure in terms of logistics and storage. But also the bundling of various courses and collective dairy knowledge, with Wageningen UR as the banner. Dutch dairy is doing exceptionally well compared to other European member states.

It is therefore a shame to undermine the entire infrastructure in order to achieve environmental objectives, which, using existing knowledge and innovation capacity, will probably lead to a more elegant solution to the problems at hand (and there they are!) instead of the current downright simple ideas. as a buyout of farmers. (Although testing is now underway on a larger scale, DSM's Bovaer drug appears to be a step towards such a more elegant solution with a claim of a 30% methane emission reduction from dairy cows)

Environmental problems need to be tackled – there is no doubt about that – but is throwing the baby out with the bathwater the most appropriate way to do so……………….?