Long Term Demands Adjustments In Dairy Farming

If we look at the long term and the total food system and all the tasks that go with it, then an adapted dairy farm is part of it. This is the conclusion of Alfons Beldman, researcher at Wageningen University & Research in an overview of developments in dairy farming in the past and expectations for the future, based on studies that have already been carried out and on six cases of Dutch EDF dairy farmers. Beldman presented the results at the congress of the Network of European Dairy Farmers on Tuesday 25 June in Zwolle.

The Dutch dairy farming sector has undergone many developments in recent years. This prompted the Dutch organisers of the conference to request an overview of developments in dairy farming in the past and expectations for the future, based on studies already carried out and on six cases of Dutch EDF dairy farmers.

Short term: survival
In the short term, the economic effects of the expiry of the derogation and the introduction of buffer strips with the associated manure disposal costs play a major role for many companies. For a considerable number of companies, it will be a matter of survival in the short term; how do I get through this period? In the medium term (2030-2035), several studies show that the entire set of goals and tasks (nitrogen, climate, manure) does not seem to be possible to achieve without reducing the livestock population. The extent of the required reduction is not really clear. The agricultural agreement mentioned 30%. The studies also show that the increase in scale will continue. Whether companies will become more intensive or more extensive/more nature-inclusive in the medium term depends on the specific incentives from the policy and possibly the market.

Long term: adapted dairy farming
For the long term (after 2035) the picture is that adjustments are needed. The starting points that belong to this are:

• Dairy farming focuses on utilizing grass and residual flows and converting them into high-quality human food.
• Dairy farming makes minimal use of feed grown far away and/or on land that is also suitable for growing human food.
• Dairy farming is animal-friendly. This means, among other things, that the animal can display its natural behaviour.
• Dairy farming makes a positive contribution to (the restoration of) biodiversity.

Strategies of six Dutch EDF dairy farmers
The (future) strategies of six Dutch EDF companies were also mapped out for the report. The entrepreneurs were asked whether they think they are ready for the future. First in general and then specifically zooming in on a number of themes (expired derogation/extensification, climate challenge, nitrogen/ammonia, biodiversity, animal welfare/animal dignity, future market demand, economic/financial). One entrepreneur indicates that he is not yet ready for the future, the other five give a positive answer to the question in different variations.

How do these entrepreneurs tackle this? In general, these dairy farmers themselves are in the lead in developing the strategy. They really invest time to orient themselves on the developments in the environment, despite the fact that this is not always seen as real work. A large part of the group calculates their plans themselves or at least makes sure that they understand the calculations well. The focus of the majority of the companies is on being among the best performing companies. The group also tries to look further ahead - the short term with, for example, the high manure sales prices is difficult for several companies, but they try to avoid this becoming the leading factor in long-term decisions.

Right choice for the future
The report further describes the possible and different future scenarios. From the regular path of scaling up to strategies for the short and medium term. The researchers emphasize that it is essential to make a good analysis in order to make a choice for your own future strategy. This starts with the entrepreneur himself: why are you a dairy farmer and what are your skills? It is then important to get a good picture of the trends in the environment, both in the direct environment and in the market and society. The strengths and weaknesses of the starting situation (structure and performance) partly determine the possibilities. A choice for a suitable strategy follows from these building blocks.

“The long-term challenges require adjustments to the dairy farming business model,” says Beldman. “It is a dairy farming that operates within a ‘safe and just’ space. This requires adjustments to the business model and in particular to the revenue model. It is difficult to develop this model from the existing situation, it is important to work more from the outside in (outside – in). What are the social demands and wishes and how can they be translated into a business and revenue model? An approach that fits in well with this is the approach of business model innovation,” concludes Beldman.