European milk crisis also affects feed industry

09-06-2009 | |

The current difficult times in the dairy industry with extremely low milk prices have also its effects on the feed industry as dairy farmers buy less compound production feeds.

In Germany the national association of feed compounders (DVT) a single digit downturn in production of cattle feed is very likely. Germany manufactured 6.3 million tonnes of cattle feed in 2007 and 2008.
According to Dr. Theo Göbbel of the Chamber of Agriculture in North Rhine-Westphalia, the current economic pressure will lead to a dramatic acceleration of structural change, whereby businesses with growth potential and efficient organization, corporate governance and strong financial management will overtake the others.
A high milk price is not the only condition for the economic success of dairy farming. Much more decisive are cost management and the capability of mobilising reserves in the production technology.
The farms of the future must be able to "deal with cows, people, money and bureaucracy successfully", said Göbbel.
It is important thing to have a clear alignment of business growth, with equities and debts that ensure liquidity of the operation and also have the courage to invest even in times of crisis.
Peter Gerber from the dairy group FrieslandCampina sees potential for the company especially for specialty products and private labels. An example is the brand Landliebe, through which a higher value can be achieved.
With the new feature “without gene technology" this also needs special feeding requirements for dairy cows, which have been implemented by the farmers, said Gerber.

Dick Ziggers Former editor All About Feed

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