Dairy Deep Dive
From June 17th to 23rd, farmers from all over the world gathered in the Netherlands for the sixth edition of the Rabobank Global Farmers Master Class. During the ‘Dairy Deep Dive’ program part, participants were given a ‘lay of the land’ in dairy and learned first-hand how downstream companies shape strategic partnerships to warrant sourcing.
Kicking of the Dairy Deep Dive, Rabobank’s Global Sector Head Dairy, Kevin Bellamy, provided the participants with a ‘lay of the land’ in dairy. Kevin observed that although there is a good reason for government involvement, food security, protecting small farmers, protecting the environment, etc., the trend is towards deregulation. In addition, he sees increased price volatility due to increased trade and interdependence between markets. “A Dutch farmer may send his milk to Friesland Campina, where it is bottled and sent to Albert Heijn for a Dutch consumer - it still may affect his price if e.g. it rains too much in New Zealand,” says Kevin. So the causes are complex and e.g. volatility in exchange rates have sometimes more influence on demand and supply than before. As a result the farm gate milk price is not always the best communicator. Kevin followed by explaining why the Dutch dairy farmers dramatically increased their production in 2016 while milk prices were low.
After Kevin’s contribution, the group got an inside view in Royal A-ware’s strategy and business. Royal A-ware is a Dutch family business, traditionally specialized in cheese trading only, but moved upstream, adding production of cheese and sourcing of milk. The company organizes win-win partnerships with its suppliers to deliver customized, A-quality, service to its customers. Its mission is to provide the shortest route from consumer to cow. To this end the company sources as much as possible locally. In addition and unlike many (dairy) cooperatives, sourcing of milk is incentive driven; there is no obligation for their sourcing partners, dairy farmers, to supply exclusively to Royal A-ware; the company doesn’t know the word ‘must’.
Subsequent visits to flagship companies of the family Stokman in Koudum and the family Westra in Oudemirdum provided the master class participants with prime examples of dairy farmers who incorporate storytelling and connecting to society in their respective business strategies. Anton and Arjan Stokman, respectively father and son, combine new technologies (such as using a milking robot and monitoring ammonia emissions) with cow friendly and citizen conscious aspects such as water beds for the cows, a ‘jakoezie’ bathing area for the cows and a free-choice barn, where cows can choose to stay in or go out grazing. Stokman is one of the two Dutch flagship farmers of McDonalds. Family Westra (Jan and Hanneke with their son Lucas and his wife Hanneke) farm at the borders of the IJsselmeer.
The largest lake in The Netherlands combining dairy farming with producing renewable energy from wind, sun and biogas. The family also runs a trading company in bio-energy by products. Next to ‘hard core’ farming the family is investing a lot in inviting the consumer to the farm. Through their website, receiving groups on their farm, a weekly blog in the local newspaper and they built a viewpoint giving a marvellous view over the farm, the nature fields close to the farm and the IJsselmeer. Hundreds of tourists and passers enjoy the view every day.
Additional key themes in the Master Class program included:
- Business strategy and strategic thinking
- Storytelling as a tool to respond to media attention and to proactively present agricultural businesses
- A pressure cooker innovation session addressing tomorrows trends, today.