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Dutch dairy in figures 2011

Dutch dairy in figures gives an up-to-date overview of the Dutch dairy sector and is divided into six topics:

Economic importance Market overview Dairy farming Milk processing industry Trade Consumption

Tables with detailed statistical information can be consulted on the website of the Dutch Dairy Board (Productschap Zuivel).

The figures for the year 2011 are provisional, but will only differ slightly from the final figures.

Quoting data from this publication is permitted, provided that the source is acknowledged. No legal rights may be derived from this publication.

For information and orders see:www.prodzuivel.nltel +31 79 368 19 00e-mail: [email protected]

Design Willemijn de Lint, HaarlemPrinting Henk Grafiamedia Center

ISSN 0303-5271June 2012

Dutch Dairy Board (PZ)Louis Braillelaan 80 PO Box 7552700 AT ZoetermeerThe Netherlands

3Productschap ZuivelDutch dairy in figures 2011

Dairy sector

The dairy sector is one of the largest and most vital sectors in agriculture in the Netherlands. The dairy sector is highly specialized, horizontally concentrated, vertically integrated and increasingly international in its operation.

Dutch Dairy Board

The Dairy Board operates on behalf of the dairy sector. The Board of Governors includes representatives from major private organizations in the sector, such as the Dutch Association for Agriculture and Horticulture (LTO), the Dutch Dairy Association (NZO), the Joint Dairy Federation (Gemzu) and the trade unions.The Board imposes levies and has regulatory powers. It provides added value to the sector based on specialization, know-how, efficiency and a customer oriented attitude. The Board’s objectives are to promote a sustained, competitive position of the Dutch dairy sector, as well as to stimulate the quality of entrepreneurship, labour and product. Besides that, to enhance food safety, animal health and environmental quality.

Market and society: market intelligence, information about dairy sector and products,

promotion of sustainability, labour affairs: budget € 3.8 million; Animal health and food safety:

monitoring and control of animal diseases, regulations, supervision and monitoring of raw milk, standardization: budget € 9.6 million;

Research and innovation: dairy farming, animal health and welfare, environment:

budget € 6.2 million; EU regulations:

milk quotas, import and export, school milk, urea determination

Tasks of the Dutch Dairy Board

The Dutch Dairy Board and the dairy sector

Gross value of production in 2011: € 25.3 bn

Horticulture 36%Arable farming 11%

Other 14%

Dairy farming 18%

Livestock, meat and eggs 21%

Economic importance

0 100 200 300 400 500 600

Other

Hotel and catering

Energy supply

Mineral extraction

Informationand communications

Education

Construction industry

Government

Industry

Agricultureand food

Health care

Trade, transportand storage

Financial &business services

Total

Value added (bn €)

€ 519.1 bn

23.8%

16.8%

10.0%

9.5%

7.9%

7.5%

5.7%

5.1%

4.1%

3.0%

1.9%

1.6%

3.1%

Dairy sector € 6.2 bn, 1.2%

Contribution of agriculture and food to the Dutch economy in 2010

source: LEI

source: LEI

Gross value of agricultural production

4 Productschap ZuivelDutch dairy in figures 2011

Economic importance

source: Dutch Dairy Board (PZ), CBS, Eurostat

Dairy products € 5.4 bn

Agricultural products € 72.2 bn

Total € 405.1 bnExports



Total€ 364.8 bnImports

Trade balance in 2011

Positive trade balance

Total € 40.3 bn



18 500 dairy farms 1.47 million dairy cows, 0.25 million dairy goats 1.2 million hectares of grassland and maize (28% of the surface area

of the Netherlands) 11.9 billion kg milk production 20 milk processing companies, 50 dairy factories 300 wholesalers 6 800 sales outlets 57 000 jobs in production, processing, wholesale and retail sales: 35% Netherlands, 45% other EU, 20% outside the EU

Key statistics


20

25

30

35

40World market€ per 100 kg of milk with 3.7% fatEU marketBasic price1)

jan-

10

feb-

10

mar

-10

apr-

10

may

-10

jun-

10

jul-1

0

aug-

10

sep-

10

okt-1

0

nov-

10

dec-

10

jan-

11

feb-

11

mar

-11

apr-

11

may

-11

jun-

11

jul-1

1

aug-

11

sep-

11

okt-1

1

nov-

11

dec-

11

Revenue from milk

1) based on EU intervention prices for skimmed milk powder and butter

on basis of Dutch quotations and world market prices for butter and skimmed milk powder

Market prices

The dairy market in 2011 looked positive. A combination of limited availability and increased demand during the first months of the year led to a strong increase in prices for all major products.Thereafter, uncertainties in the market affected price levels for both milk powders and cheese, but prices gradually recovered and reached normal levels thanks to good demand from mostly Asian markets.Hesitation on the market initially had less effect on butter prices owing to the limited supply from New Zealand. Only in the last quarter of 2011, when New Zealand butter production rose again, prices decreased substantially.The average prices for non-skimmed milk powder, skimmed milk powder and butter, as well as the average indicative price for Gouda cheese, were all well above the 2010 level.

source: Dutch Dairy Board (PZ)

Market overview



Market overview

Consumer prices

Retail prices of dairy products rose generally only a little in 2011. The price increases for products like cheese and consumption milk were more or less in line with inflation. The price of butter was slightly higher, while prices for dessert products stabilized or even declined.

90

95

100

105

110

Total consumer spending

ButterCheeseYogurt, cream, desserts and

similar products

Drinking milk

0

2

4

6

8

10

Vanillevla (1 liter)

Roomboter, ongezouten (250 gr)

Halfvolle melk (1 liter)

Belegen Goudse kaas (1 kg)

2009 2010 2011

2005 2010 2011

Inde

x

Average consumer prices for dairy products

Development of consumer price index

source: CBS

(€)

2005 2010 2011

Mature Gouda cheese (1 kg) 7.18 8.80 9.30

Semi-skimmed milk (1 litre) 0.60 0.64 0.67

Butter, unsalted (250 g) 1.01 1.04 1.16

Vanilla custard (1 litre) 0.90 0.86 0.82

(average 2009=100)

Milk prices

The favourable progress of prices in the market for dairy products was reflected in a positive development of the milk price paid to dairy farmers. Dairy farmers saw their income increase once more, after the earlier recovery in 2010. The average price that was ultimately paid for milk was 14% higher compared to previous year.

Market overview


25

30

35

40

2005 2006 2007 2008 2009 2010 2011

Netherlands

EU

€ per 100 kg

Milk prices paid

source: Dutch Dairy Board (PZ), European Commission

Taking a sample of on-farm milk to determine milk price pay-out

Market overview


International milk price comparison

source: LTO (www.milkprices.nl)

Note: prices for standard milk with 4.2% fat and 3.4% protein (excluding VAT and including supplementary payments)

(€ per 100 kg)

Company Country 2010 2011 2011/2010

Hämeenlinnan O. Finland 39.22 43.28 10.4%

Granarolo (Noord) Italy 34.92 40.40 15.7%

FrieslandCampina Netherlands 32.82 37.15 13.2%

DOC Kaas Netherlands 32.41 36.86 13.7%

Arla Foods DK Denmark 32.38 35.13 8.5%

Alois Müller Germany 30.79 35.04 13.8%

Danone (Pas de Calais) France 32.20 34.55 7.3%

Sodiaal Union France 31.71 34.34 8.3%

Bongrain (Basse Normandie) France 31.81 34.34 8.0%

Milcobel Belgium 31.96 34.18 6.9%

Lactalis (Pays de la Loire) France 31.65 34.17 8.0%

Glanbia Ireland 29.72 34.14 14.9%

Humana Milchunion eG Germany 30.02 34.08 13.5%

Nordmilch Germany 30.39 33.75 11.1%

Kerry Agribusiness Ireland 29.00 33.61 15.9%

Dairy Crest (Davidstow) United Kingdom 28.75 31.76 10.5%

First Milk United Kingdom 25.26 28.83 14.2%

Average 31.47 35.04 11.3%

Fonterra New Zealand 30.37 30.12 -0.8%

USA class III USA 27.23 32.70 20.1%

Emmi Switzerland 48.90

Milk quota

The European milk quota system limits milk production per Member State. In accordance with EU decisions on reforms in European dairy policy the milk quota in the quota year 2011/12 was again increased by 1%. The total Dutch milk quota for deliveries to factories was more than 11.7 billion kg. This quota was exceeded by Dutch dairy farmers by 0.5% (including adjustment for fat content), which resulted in a superlevy of € 16.4 million. This fits the pattern of recent years in which exceeding the quota was more the rule than the exception. It illustrates the fact that milk quotas still impose a limit on dairy farming in the Netherlands.

10.8

11.0

11.2

11.4

11.6

11.8

0 10 20 30 40 50

2005/06

2006/07

2007/08

2008/09

2009/10

2010/11

2011/12

mln €bn kg

0.0

8.8

39.6

43.8

13.1

38.7

16.4

12.0Milk deliveriesMilk quota

2011/122005/06 2007/08 2009/10

Utilization of Dutch milk quota

Superlevy


Dairy farming

T A B L E S


Scale of operations

The number of quota holders declined once more in the quota year 2011/12, to well below 19 000 (-2.6%). This development reflects the continued increase in scale of operations in Dutch dairy farming.Since quota year 2005/06 the quantity of basic quota held by companies with a quota of 1 million kilograms or more doubled. This now represents nearly 30% of the national quota.

Basic quota (mln kg)

Size category (x 1 000 kg)

2005/06 % 2010/11 % 2011/12 %

< 500 3 623 33 2 349 20 2 184 19

500 - < 1 000 5 716 52 6 267 54 6 194 52

1 000 - < 1 500 1 259 11 2 089 18 2 291 19

> 1 500 459 4 979 8 1 133 10

Total quota allocated 11 056 100 11 684 100 11 802 100

Total number of quota holders

22 272 19 028 18 528

Distribution of basic quota between size categories of holdings


Dairy farming


1 300

1 350

1 400

1 450

1 500

1 550

2011201020092008200720062005

Dairy cows

Milk yield

7 200

7 400

7 600

7 800

8 000

8 200

Dai

ry c

ows

(x 1

000

)

Milk

yie

ld (k

g)

Dairy cows and milk yield per cow

source: Dutch Dairy Board (PZ), CBS

Dairy farming

Stock of dairy cattle

The decision to expand EU quotas five years ago led to a rather abrupt increase in the total dairy herd. However, it now seems that the long term trend of greater efficiency with fewer cows is back. The gradual growth in milk production in the past few years has primarily been achieved by an increase in the milk yield per cow. In line with this, in 2011, a slight decrease in the dairy herd (-0.6%) appeared, as well as a further increase in the average milk yield per cow, to well over 8 000 kg per year (+0.8%).


67.5%

3.0%

14.8%

5.8%

7.0%

1.9%

52.6%

13.8%

9.8%

15.3%

4.8%

3.8%

Herring bone parlour

Tied up stable

Tandem parlour

Parallel parlour

Automatic milking system

Rotary parlour

Year 2005

Year 2011

Classified according to types of milking parlours

source: Stichting Kwaliteitszorg Onderhoud Melkinstallaties

Dairy farming

Rotary parlour


Processing of milk

The Dutch milk deliveries increased modestly in 2011 by 0.2% to 11.6 billion kg. This growth was substantially lower than the EU average. Milk deliveries in Germany (+2.4%) and France (+5.3%) showed strong growth in the past year. Outside the EU particularly significant increases were seen in Argentina (+13.5%) and New Zealand (+10.5%), major competitors on the world market.

A strong increase in imports of raw material resulted in a rise of 1.7% to almost 11.8 billion kg of milk processed in the Netherlands in 2011. Despite the increased availability of milk, cheese production decreased slightly compared to 2010. The extra milk found its way mainly to the production of butter and butteroil, condensed milk and other products. The production of milk powder, drinking milk and fresh milk products decreased in 2011.

Milk processing industry


bn kg

International EU Member States

bn kg0 30 60 90 120 150

Australia

Argentina

NewZealand

USA

EU-27

+2.4%

+13.5%

+10.5%

+1.8%

+2.1%

0 5 10 15 20 25 30

Denmark

Ireland

Poland

Netherlands

France

Germany

-0.6%

+3.9%

+3.4%

+0.2%

+5.3%

+2.4%

Milk deliveriesGrowth comparing 2011 with 2010

source: Dutch Dairy Board (PZ), Eurostat, national statistics

T A B L E S

Cheese is by far the most important dairy product. Nearly 56% of the milk processed in the Netherlands goes into the cheese factory. Most of the growth in the quantity of milk processed since 2005 (+0.8 billion kg) has gone into cheese production. This increased in this period by 11.5% to 750 thousand tons in 2011.

Drinking milk and other fresh products 8.9%

Cheese 55.7%

Butter and butteroil 1.6%

Milk powder 13.9%

Condensed milk 6.5%

Other 13.4%

Consumptiemelk en -producten 9,3%



Industrial milk production

(mln kg)

2010 2011 2011/2010

Milk delivered to factories 11 622 11 642 0.2%

Milk available for processing 11 569 11 769 1.7%

Drinking milk and milk products1) 2) 1 080 1 043 -3.4%

Cheese including other fresh quark 753 750 -0.5%

Butter and butteroil 179 187 4.1%

Non-skimmed milk powder 135 131 -3.0%

Skimmed milk powder 64 62 -3.0%

Condensed milk 3) 347 354 2.1%

1) excluding added ingredients 2) including cream 3) including coffee milk (evaporated milk)



Industrial dairy production



Meppel

Rouveen

Limmen

Gerkesklooster

Bolsward

Scharsterbrug

Nunspeet

Gorinchem

Workum

Ommen

Hengelo

Zelhem

BeemsterKatwoude

Dalfsen

Schoonrewoerd

Zoetermeer

CuykRijkevoort

Bedum

Lutjewinkel

Bleskensgraaf

Maasdam

Rotterdam

EindhovenNuenen

Den Bosch

MolenschotVeghel

Born

MarumNoordwijk

Leeuwarden

Beilen

Balkbrug

Kampen

BorculoLochem

Nijkerk

Steenderen

Hoogeveen

Coevorden

Drachten

Lelystad

Varsseveld

Zeewolde

Boxmeer

Etten-Leur

FrieslandCampina 25

DOC Kaas 2

Hyproca Dairy Group 2

Leerdammer Company 2

Nutricia 2

Rouveen / Bastiaansen 2

Vreugdenhil 2

Arla Foods - Nijkerk 1

CONO Kaasmakers - Beemster 1

Delta Milk - Bleskensgraaf 1

Farm Dairy - Lelystad 1

Globemilk - Boxmeer 1

Henri Willig - Katwoude 1

Hochwald - Bolsward 1

Katshaar Zuivel - Coevorden 1

Nestlé - Nunspeet 1

Özgazi - Etten-Leur 1

Vecozuivel - Zeewolde 1

VIV Buisman - Zelhem 1

De Zuivelhoeve - Hengelo 1

Key statistics

source: Dutch Dairy Board (PZ), CBS

2010 2011

Companies1) 22 20

Number of factories 52 50

· Cooperative 32 31

· Non-cooperative 20 19

Number of employees 10 000 9 800

Milk processed (mln kg) 11 569 11 769

Production value (mln €) 5 880 6 410

1) Companies that process more than 10 million kg of raw milk and/or cream, situation as per 31/12/2011


Structure

At the end of 2011 the Dutch milk processing industry comprised 20 compa-nies with a total of 50 factories. Of these, 5 companies were cooperatives. The cooperatives process their milk in 31 factories.Due to the good market situation, with high prices, the value of production increased in 2011 by 9% to over € 6.4 billion. Per 100 kg of milk processed the value increased to € 54.50, which is 7% more than in 2010.


Top 10 largest dairy companies

source: Rabobank

Company Country Dairy turnover (€ bn)

1 Nestlé Switzerland 18.62 Danone France 14.03 Lactalis France 13.44 Fonterra New Zealand 11.35 FrieslandCampina Netherlands 9.76 Dairy Farmers of America USA 9.37 Dean Foods USA 8.48 Arla Foods Denmark/Sweden 7.49 Kraft Foods USA 5.5

10 Meiji Japan 5.3

Note: Turnover in 2011 + mergers and acquisitions between 1 January and 15 June 2012

Trade


T A B L E SExport

Dutch dairy exports fell in terms of volume in 2011, but realized a significantly greater value than in the previous year thanks to the positive trend in prices. The decline in volume affected important product categories , such as cheese, butter and non-skimmed milk powder. In contrast, exports of skimmed milk powder to the world market increased sharply.The value of Dutch dairy exports in 2011 was almost € 5.4 billion (+17%). Because the value of exports increased more than that of imports, the positive contribution of dairy to the Dutch trade balance increased by almost € 600 million to over € 3 billion.The greater part of the export value (65%) is earned by trade within the EU. Germany remains by far the main market and, together with Belgium and France, accounted for nearly three quarters of sales.Cheese, butter (oil) and skimmed milk powder are the most important product categories here.

Trade


Top 5 export destinations 2011

source: Dutch Dairy Board (PZ), Eurostat, CBS

(mln kg) Index (2010=100)

Cheese Butter and butteroil

Index Index

Germany 238.8 97.2 Belgium 39.5 124.9

France 65.3 100.3 France 36.5 114.4

Belgium 64.5 86.3 Germany 34.9 75.6

Spain 40.2 86.6 Italy 6.6 112.1

Russian Federation 29.0 117.5 Singapore 4.3 106.1

Other countries 204.1 90.8 Other countries 39.7 64.8

Total 642.0 94.2 Total 161.5 89.3

Non-skimmed milk powder Skimmed milk powder

Index Index

Nigeria 29.9 93.0 Belgium 12.7 98.5

Saudi Arabia 11.9 84.6 Germany 11.2 108.7

Angola 11.4 102.7 Nigeria 9.9 89.9

Kuwait 9.5 69.9 Vietnam 9.6 152.2

Germany 8.4 101.7 Thailand 7.5 137.3

Other countries 73.9 87.9 Other countries 62.9 119.5

Totaal 145.0 88.8 Totaal 113.8 115.4

The main destinations for exports of Dutch cheese outside the EU are Russia, North Africa, the USA and Japan. For non-skimmed milk powder and condensed milk destinations in Africa, Middle East and Southeast Asia are the most important.

EU € 3.5 bn

Third countries€ 1.9 bn

Germany39% Other

third countries63%

Belgium21%

Nigeria10%

Saudi Arabia7%

Russian Federation 7%

United Arab Emirates5%

South Korea4%

Indonesia4%

France13%

Spain5%

Greece 5%

Italy4%

United Kingdom 4%

Other EU countries 10%

2005

0 5 10 15 20 25 30

Rest of the world

Belarus

Argentina

Australia

USA

New Zealand

EU

0 5 10 15 20 25 30

Nederland

Netherlands 2010 2011

26.1%26.8%

26.3%

26.1%26.2%

22.3%

11.9%11.7%

8.4%

8.2%

3.6%4.2%

3.2%

20.0%20.8%

24.2%

7.2%11.2%

4.1%3.0%

4.4%

5.1%5.0%

5.7%

bn kg

Position of Dutch dairy exports on the world market

Export value per destination 2011

Trade


Development of export shares of the most important dairy exporting countries (total world trade 2005/2010/2011:43.9/52.7/58.2 bn kg)

source: Dutch Dairy Board (PZ), Eurostat, CBS


Trade


Imports

Although being primarily an exporter of dairy products, the Netherlands also imports a substantial amount of dairy products annually. In 2011, the total import value was € 2.3 billion (+ 10%), almost entirely from the EU.Belgium and Germany together accounted for over 60% of the total. The most important products were cheese, butter and, to a lesser extent, milk powders.

0

50

100

150

200

201120102005

Cheese

Skimmed milk powder

Butter and butteroil

Non-skimmed milk powder

mln

kg

Import value 2011: € 2.3 bn

Germany 45%

Belgium 17%

France 11%

United Kingdom 5%

Ireland 4%

Poland 4%

Other countries 14%

Imports of daiy products

Most important countries of origin

source: Eurostat, CBS

source: Eurostat, CBS

Consumption


Consumption

Cheese consumption in the Netherlands is at a level of over 19 kg per capita. Since 2005 the level of consumption of cheese has hardly changed.The average consumption of butter has been fluctuating for years, between 3 and 4 kg per capita. In 2011 it was over 3 kg of butter.

The consumption of drinking milk (small packs) has seen a downward trend for years. In 2011 this amounted to 49 kg per capita, a slight decrease in comparison with the previous year. Compared to 2005, an average Dutchman drinks 7 kg less milk.

The consumption of fresh milk products (yogurt, custard, and similar products), in contrast, has been stable for many years.

T A B L E S

15

20

25

30

35

40wereldmarkteuro’s per 100 kg melk met 3,7% vet en 3,4% eiwitEU-marktbasisprijs1

jan-

10

feb-

10

mrt

-10

apr-

10

mei

-10

jun-

10

jul-1

0

aug-

10

sep-

10

okt-1

0

nov-

10

dec-

10

jan-

11

feb-

11

mrt

-11

apr-

11

mei

-11

jun-

11

jul-1

1

aug-

11

sep-

11

okt-1

1

nov-

11

dec-

11

0 30 60 90 120 150

Syrups(ready-to-drink)

Mineral water

Wine

Juices andnectars

Drinkingmilk

Beer

Tea

Soft drinks

Coffee

2009

per capita in litres

2010

Consumption of beverages

(per capita in kg)2005 2010 2011

NL EU NL EU NL EUButter 4.2 3.9 3.0 3.6 3.3 3.6

Drinking milk 56.0 66.7 50.0 64.7 49.0 64.3

Cheese 19.1 16.1 19.5 17.1 19.4 17.1

Consumption of dairy products

source: Dutch Dairy Board (PZ), European Commission, IDF

source: Dutch Dairy Board (PZ), Netherlands Federation for Soft Drinks, Waters and Juices, Dutch Wine Board, Royal Netherlands Federation for Coffee and Tea, Dutch Brewers

Consumption


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