Over 1,200 dairy farmers quit supplying Friesland Campina

Over 600 farmer suppliers to Dutch dairy co-op FrieslandCampina ceased supplying the milk processor in 2019, according to the co-op’s annual report for last year. Friesland said the number of dairy farms that supplied the co-op with milk in 2019 stood at just under 11,500, which is almost 630 farms fewer than the previous year.

This decline in farmer suppliers comes despite Friesland paying a higher milk price of almost 38c/l in 2019, which includes a dividend payout from the co-op of 1.07c/l and a ‘Meadow Milk’ premium of 0.65c/l, a bonus payment for cows fed on grass.

Dutch milk production has been in freefall due to new quotas on phosphates

This is the second consecutive year that Friesland has seen a sharp drop in its number of farmer milk suppliers. In 2018, over 600 farmers also quit supplying the Dutch co-op, meaning over 1,200 dairy farmers have ceased providing milk to the co-op in the last two years.

This reduction in farmer suppliers has seen Friesland’s milk pool fall by almost 675m litres over a two-year period, to stand at less than 10bn litres last year. For much of the last two years, Dutch milk production has been in freefall due to new quotas on phosphates, which forced many farmers to cull cow numbers or exit dairying altogether.

Reflecting the fall in milk supply last year, Friesland saw its sales for 2019 decline 2% to €11.3bn. However, the Dutch co-op’s profits soared 37% last year to €278m. Operating profits increased by 26% to €432m, as operating profit margins widened to 3.8%.