Farm Ireland

Saturday 18 August 2018

Dutch dairy farmers warned expansion plans could be hampered by processing capacities

Black and white cows on farmland
Black and white cows on farmland
Margaret Donnelly

Margaret Donnelly

Dutch dairy farmers are being warned to ensure their phosphate capacity is in order and to spread their annual milk supply to prevent a stall in processing.

Dairy giant FrieslandCampina has written to its Dutch suppliers asking them not to produce more phosphate than is covered by the phosphate rights of each dairy farm and to spread the milk supply throughout the year as much as possible.

"This will prevent not only a potential imbalance between milk supply and processing capacity, but also a potential standstill of the milk supply."

From January 1, 2018, there will be a phosphate rights system for dairy cattle in the Netherlands and it says it will be a "challenge" for each dairy farm to annually align its dairy livestock and the phosphate production per cow to the available – and purchased – phosphate rights, and to spread production over the year as much as possible.

"If the phosphate production is too high in the first half-year, it will have to be compensated by a lower phosphate production and, hence, a lower milk production and/or a smaller livestock in the second half-year."

A survey of FrieslandCampina suppliers this year found that the number of phosphate rights the member dairy farmers aspire to take over is much higher than the number of rights actually for sale.

Also, the dairy farmers surveyed said they wanted to increase the number of milk-producing cows at their farms.

FrieslandCampina said its processing capacity and the capacity it has contracted from third parties in 2018 appear to be sufficient to be able to process the milk supplied by all its members, based on the assumption that all FrieslandCampina members will stay at or below the statutory level of the phosphate rights system and that they will succeed in reducing the peak supply from January through May 2018 by ensuring a more steady milk supply throughout the year.

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However, it warned that should it turn out not to be possible to prevent any imbalance between milk supply and processing capacity, FrieslandCampina will announce a temporary standstill for the supply of milk.

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