Play all audios:
28 FEBRUARY 1997 ------------------------- HOW DUTCH FIGHT TO STAY AFLOAT… FALLING MILK PRICES, RISING FEED AND FERTILISER COSTS, AND ENVIRONMENTAL CONSTRAINTS, CONFIRM THAT DAIRYING IN
HOLLAND IS UNDER PRESSURE. FARM BUSINESS CONSULTANT TONY EVANS REPORTS DUTCH dairy farm profitability has declined by 18% in real terms since the introduction of milk quotas. Milk price has,
at the current price equivalent of 30p/litre, remained static but in real terms has declined over the past 10 years. Feed and fertiliser prices have historically been 20-30% lower than
those in the UK. So until the past few years overall profit has been high, but then with land at £17,297-£19,768/ha (£7000-8000/acre) it has to cover repayment. Dairy farms are farmed much
more intensively with stocking rates at 2.5 cows a ha (1/acre). Nitrogen and phosphate levels are very high and mineral limitations are being introduced rapidly to conform with national and
EU legislation/standards – which also include a reduction in stocking rate. Leasing and quota can be traded under specific guidelines (see below left) and purchased milk quota depreciated,
on a straight-line basis, over eight years. Looking at costed farm data in Holland a comparison of milk production systems can be made and the message is simple: High yields from forage
using genetically superior cows managed on simple systems provide the best returns. With costs of production rising and stocking rates having to fall, the Dutch are keen to minimise losses
and increase efficiency a cow. To this effect their dairy research station at Lelystad is pursuing three key areas: • Increasing yield a cow. Current results show good margins, with
milk quality and herd fertility maintained. • Reduced fertiliser usage by using high clover swards – two herds with separate land areas are being compared on a high N policy at
300kg/ha N (240 units/acre) and a low N policy at 100kg/ha N (80 units/acre). Current results indicate a lower margin/ha return of £480 for the low N policy. However, if quota was leased out
this lower margin disappeared. But would farmers do it? • Robotic milkers – research has been underway for almost eight years with performance slowly improving but capital
investment cost still very high. Current results show very low cell counts. Cows will accept this method of milking when housed but less so when at grass. TBCs vary according to the system
used. This system could be the way ahead for the family if there is a shortage of labour. • Tony Evans wrote this report after a study tour to Holland last summer with Genus. He is
now a senior dairy business consultant with Andersons. * ------------------------- Quota leasing and purchase guidelines HollandUK Comparison (Dutch "Rule of thumb")
Leasing15p (50% of10-15p milk price) Purchase£1.50 (5 x55-65p milk price) ------------------------- Dutch dairy herd comparisons 19901996%Change Number of dairy herds47,00036,000-23 Herd
size4046+15 Yield a cow(litres)6,0696,638+9 ------------------------- Dairy farm performance comparisons HollandEngland/Wales 1995/961995/96 Milk producers36,01027,332 Average herdsize4674
Litres a cow6,6385,325 National quota(m litres)10,94011,313 ------------------------- Profitability comparison Holland England/Wales (Top 25%) (Top 10%) Gross output100100 Variable costs2835
Gross margin7265 Labour610 Power & machinery1512 Sundries165 Property charges186 Finance62 Total overheads6135 Profit1130