Environmental constraints limit Dutch milk production

Published 7 August 19

The Netherlands was amongst the first main milk producing nations to deliberately curb milk production due to environmental constraints. Here we take a look at how that initiative has impacted on the industry.

The abolition of milk quotas at the end of March 2015 and promising long term developments in the global dairy market led to boosted investment in the Dutch dairy industry. This was aimed at capacity growth through modernisation, expansion and new construction. Strong growth in dairy farming followed and led to the Netherlands exceeding the phosphate production ceiling set by the European Commission in both 2015 and 2016.

To address the issue, the phosphate reduction plan came into effect in 2017 and the phosphate rights system became applicable from 1 Jan 2018. This has led to the Dutch dairy herd decreasing significantly in the last two years and will limit herd growth in the coming years.

Netherlands update 

Dutch milk production fell almost 3% in 2018, to 13.7 billion litres. Production decline began in February and picked up speed from August onwards. In part this was due to culling extra cattle to comply with the phosphate rights system. By December 2017, the herd size had shrunk markedly, according to Eurostat, to 1.67m dairy cows. By December 2018, this had dropped further to 1.55m dairy cows.

The Netherlands recorded the largest percentage decrease in cattle numbers within the EU as a result of the introduction of the phosphate rights system. However, farmers have managed to increase the average milk yield per cow and somewhat limit the decline in milk production. In 2018, the average yield was up more than 1% on the previous year to 8,435 litres per cow.

The decline in the dairy herd led to phosphate production of 77.4m kg in 2018 falling well below the sector ceiling of 84.9m kgs.

Source: Eurostat, ZuivelNL