Impact of DDB action on Friesland Foods

30 May 2008

At 10.00 a.m. on Thursday, 30 May, 263 member dairy farmers of Friesland Foods announced that they would not be supplying any milk that day.

The quantity of milk involved amounts to 430,000 kilos per day. Friesland Foods recorded the details of the dairy farmers and subsequently did not collect the milk from their farms. Friesland Foods has just over 9,400 member dairy businesses. Annually, Friesland Foods processes 5.3 billion kilos of milk, supplied by the member dairy farms. At this time of the year, some 15 million kilos of milk are collected every day.

On Tuesday, 27 May, the Dutch Dairymen Board (DDB) held a demonstration at the Friesland Foods daily fresh dairy production facility in Nijkerk. An estimated 300 to 500 dairy farmers took part. The demonstrators blocked the facility’s access routes from approximately 11.00 a.m. and 3.00 p.m., so that the lorries carrying products could not leave nor could milk be delivered. This led to some delays in deliveries to supermarkets.

Friesland Foods understands that dairy farmers are trying to highlight their income situation and rising costs. However, Friesland Foods considers the solution put forward by DDB unrealistic – namely that cooperatives should pay a milk price that covers costs. After all, the value of a product is determined by the market. And Friesland Foods’ job is to generate the highest possible revenue in the market.

Price trends are dictated, in particular, by the supply and demand for standard products such as milk powder, whey powder, butter and packaged cheese. Globally, there are many dairy product suppliers, operating regionally, nationally and internationally. Because Friesland Foods generates two-thirds of its revenue outside the Netherlands, it has many competitors and is therefore not just concerned with supply and demand in the Netherlands, but globally. Exchange rate movements also play an important role in the selling prices for dairy products.