The roughly 15,000 dairy farmers in our country have seen worse times. The milk price is historically high. For the first time this week, they will receive an amount of 52 euros and 50 cents per 100 liters. Six years ago it was different: then a low point was reached with just 25 euros for 100 liters of milk.
But there is no euphoria. Nils den Besten, dairy farmer with 105 cows in Brandwijk says this morning in the NOS Radio 1 News: “No, in terms of money I am not going to get in. We really need that good price. Because the costs are skyrocketing at the moment. Energy, diesel, costs to feed the cows, because the grain price is also rising enormously. We can farm the milk price, but it is also absolutely necessary.”
According to trade association ZuivelNL, the high milk price does not just come out of the blue. “The milk price has been rising since the middle of last year and that effect is now being reinforced by the war in Ukraine,” said spokesman Martin Valstar. “Global milk production simply cannot keep up with consumer demand. Demand is increasing by 1 to 2 percent annually, but production is lagging behind.”
Global problem
There are various reasons for the worldwide lagging production. Valstar: “We also see that the weather conditions are disappointing this season, for example in the southern hemisphere. But Ireland also had a bad spring, and Ireland is an important producer in the EU. If the weather is dry or cold, this has an effect on the growth of the grass, the quality of the feed. And that influences the number of liters that a cow gives per day.” In the US, high animal feed prices held back the increase in milk production.
And then of course there is the war in Ukraine which is driving up prices. “As a result, inflation increases, which greatly increases costs on the farm.” And that gives farmers less incentive to produce a lot of milk.
Consumer consequences
The high milk price also has consequences for the prices in the supermarket. “The higher prices that have to be paid to us will undoubtedly be passed on to the customers by the supermarkets,” says Nils den Besten. “They’re probably not going to pay for it out of their own pocket.”
The umbrella organization of supermarkets, the CBL, says about this: “As an industry association, we do not deal with contracts, that is part of the direct agreements between supplier and buyer.” Market leader Albert Heijn has not yet responded to questions about the higher milk price.
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