Report Synopsis

Opportunities for the Dutch dairy industry: how to become more market oriented

Kees Hemminga

This is a research report for a Nuffield farming scholarship. In this research I have been looking for opportunities for the Dutch dairy industry to become more market oriented, and furthermore how I can operate more market oriented on my own farm. Thanks to both Nuffield and Rabobank, as a dairy farmer I have been given the opportunity to perform this research. Because I only produce milk, instead of processing it or selling it on the market, I have the feeling that there is a disconnect between my farm and the market. Through discussions with various entrepreneurs in the Netherlands as well as abroad, I have preformed this research in a practical manner.

Changing consumer behavior forces businesses to make a clearer choice between either lower costs or higher added value. The costs of dairy production in the Netherlands are relatively high to compete on lowest price on the global market. Therefore added value seems to be the preferred alternative. As a result a growing range of dairy products focused on a specific market segment or niche have become available on the market. Differentiation is achieved based on various characteristics in milk or based on how the milk was produced. Around the world there are many examples of the latter where sustainable milk production is used as a mean to add value. My advice to the Dutch dairy sector is to become more market oriented by various of milk types that are sufficiently differentiated from conventional milk and each other. A larger share of Dutch dairy farmers will be able to operate more market oriented when a broader range milk is differentiated. By creating a partnerships based on flexible chains farmers will be able to adapt to changes in the market more quickly. For successful collaboration there should be no imbalance between partners in a chain, an external director may help to overcome this problem.

First of all, to become more market oriented on my own farm I would like to participate in an differentiated type of milk. Even though I am not yet qualified for Planet Proof milk, I am committed to be so as soon as possible. I would like to see a change in the carbon footprint approach of Planet Proof milk towards a carbon balance or carbon cycle approach. Second, I believe that selling own produce in your own farm shop has the highest market orientation. Farmers that are closer to the consumer enjoy a higher reputation and are judges less on their actual performance. A vending machine for selling own produce as seen at Trink Dairy in England, is a proper alternative for having a farm shop.

By constantly questioning your own opinions one will ultimately be able to form a set of strong beliefs that will stand against trends and other external influences. Or like an American farmer told me: “Have your values right to get through the fashion fads!”

Nuffield has been an amazing experience for personal development, to learn more about my research topic, and to work on building a large international network. Therefore I am very grateful to everyone who has supported me on my Nuffield journey.

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