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Friesland Campina Raises Milk Price Whilst Paying Farmers to Cut Production

03 October 2016

EUROPE - European dairy co-operative Friesland Campina is paying members to cut milk production, but also considerably increasing milk prices, which could leave their milk producers wondering over the best strategy to improve returns, UK levy board AHDB Dairy has reported.

The company will pay its members around 10 euro cents per kg to reduce milk production between October 2016 and March 2017. If any of the participating farmers have also applied for the EU’s milk production reduction scheme, they could receive around 20 pence for every litre 'not produced'.

However, Friesland Campina has also increased its milk price by a significant 17 per cent over the last two months, taking it to 29.25 euro cents per kg from 1 October.

Friesland Campina says its scheme aims to help farms reduce phosphate production in anticipation of regulations being introduced in the Netherlands. However, the co-op’s members in Germany and Belgium can also participate and overall it aims to reduce production by 146m litres between October and March. This would theoretically equate to a 0.2 per cent reduction in EU-28 milk production, compared to the same period in 2015/16.

AHDB Dairy said that there is likely to be some overlap with litres included in the EU-wide reduction scheme, which involves much larger volumes, so the impact of the Friesland Campina scheme could be relatively small.


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