British dairy farmers could influence milk processors’ decisions if they pooled their collective power and collaborated more, the NFU Conference heard.
Klaas Johan Osinga, dairy specialist at Dutch farmers’ union LTO, told a packed audience how more than 90% of milk in the Netherlands was bought by farmer co-operatives, with FrieslandCampina accounting for about three-quarters.
Only about half of UK milk goes into farmer-owned businesses.
See also: Read more from the NFU Conference
This allowed farmer co-operatives, particularly the largest, to “take charge” and lead the market to the benefit of producers, Mr Klaas said.
He urged British producers to do the same and work together to present a single, unified voice to decision-makers.
“If the minister has five opinions brought to her rather than one then you leave it up to her to decide which one to act on,” Mr Klaas said.
“Collaboration doesn’t always work, but if we had a problem, we would come together and talk about it.”
A collaborative attitude between Dutch processors and producers let farmers contribute to the decision-making and direction of their co-operatives, said Mr Klaas.
In this way, farmers helped drive innovation in product development, add value to their milk and open up new markets. This meant they were not so reliant on the lower value domestic liquid milk market, he said.
In the Netherlands dairy co-operatives have their own marketing programmes and invest heavily in new products, processing about 80% of milk into added-value products and exporting 60% of all dairy goods.
The average farmgate milk price in the Netherlands is hovering around 31c/litre (22.7p/litre) – about 3c/litre (2.2p/litre) lower than the cost of production.
But most producers were buffered by cash left over from last summer’s higher milk prices, Mr Klaas said.
While there was some anxiety among Dutch producers, this appeared to be far less than in the UK, he said, and Dutch farmers were generally “excited” about the lifting of milk quotas at the end of March.
Although the Netherlands has a population of just 17m (65m in the UK), dairy farmer numbers stand at about 17,000.
Numbers in the UK have now dipped below 10,000, as more producers exit the industry.
Netherlands dairy facts:
- 17,000 producers
- Between 1996 and 2013, dairy cow numbers fell 1.1% from 1.65m to 1.55m (UK cow numbers fell 2.7%, from 2.51m to 1.78m)
- 91% of milk was bought by farmer co-operatives in 2013 (55% UK)
- About two-thirds of milk bought by farmer co-operative FrieslandCampina
- Produced about 12m litres of milk in 2014, about 4% over its quota
- 161% self-sufficient in milk in 2013 (81% UK)
- Fourth biggest dairy producer by volume in the EU in 2013 and 12th biggest in the world (UK is 3rd and 11th).