Today the Member Council of Zuivelcoöperatie FrieslandCampina U.A. voted in favour of the proposal for balanced growth. This adjustment of the milk money regulations is to ensure a good balance between the supply of farm milk and the market demand, now and in the future. The balanced growth is in line with FrieslandCampina’s new strategy with a market and sustainability focus.
Frans Keurentjes, Chairman of the Board of Zuivelcoöperatie FrieslandCampina U.A.: “The members of the dairy cooperative considered and discussed thoroughly the balance between supply and market demand many times in the past year. The Member Council approved the proposal for balanced growth. This allows the company to better respond to more cost-effective sales of milk products and it supports a well-balanced business development for the individual dairy farms.”
In a situation of balanced growth the total volume of farm milk supplied by the member dairy farmers grows in pace with the market demand. The room for growth is determined by a growth percentage in line with the market, which is always established for a period of two years based on the forecasts for future global growth. The market-based growth percentage for 2019 and 2020 has been established to be 1.5 percent. Additionally, room for growth is left by farms quitting business, leaving farms or farms that do not fully make use of the reference volume assigned to them. When the collective milk supply exceeds the market-based growth plus the latent space, a deduction of 10 eurocents per kg milk over the extra supplied farm milk will be applicable to individual milk farms that have grown more than allowed by their reference volume. For special milk flows the market-based growth percentage can be deviated from when the demand exceeds the supply of farm milk for this particular milk flow.
The adjustment of the milk money regulations will come into effect on 1 January 2019.