Dutch Dairy Farming in 2030

Baseline scenario

The baseline scenario is based on existing and implemented policies and the continuation of past behaviour in the dairy sector. Policies that have currently not yet been detailed have been excluded from the scenario. The baseline scenario assumes that dairy farmers will use available financial means to invest in the growth of their farms. In this scenario, the total amount of dairy cows declines over the coming decade towards 1.48 mln. The amount of milk produced increases by 4 per cent, as the annual milk production per cow  is expected to grow in line with the trend shown over the past period. The average herd size on Dutch farms will increase from 101 dairy cows to 139.

Wageningen University & Research has used a newly developed economic model with which the effect of economic, policy, and societal changes on the structure of the Dutch dairy farm sector can be explored. The model uses data from the Central Bureau of Statistics (CBS) agricultural census and “het bedrijveninformatienet” of Wageningen Economic Research.

The research shows that part of the dairy farmers is expected to terminate their farm over the next decade due to age and lack of a successor. For another part, inadequate financial results are the main reason for quitting farming.  

With the animal numers in the baseline scenario, the dairy sector stays within the limits of phosphate and nitrogen excretion ceilings, achievement of the goal laid down in the climate agreement seems within reach and additional measures seem necessary to achieve targets with respect to ammonia emissions.

The research further shows that the results of the baseline scenario are sensitive to changes in basic assumptions in the model such as milkprices, technical results and interest rates.

Explorative scenarios

In addition to the baseline scenario, three possible scenarios have been explored in response to the question: What would happen if…? These scenarios are based on potential future societal changes and are intended as a way to explore what possible alternative pathways the dairy sector might encounter over the next ten years.

In the first explorative scenario, the market and society increase their focus on nature-inclusive dairy farming. In the second scenario, ‘free market’, the primary focus is in producing sufficient affordable food, without additional restrictions to protect nature or the environment. In the third scenario, ‘focus on social demands and return on investment’, the dairy farmers do not only focus on maximum growth. Instead, the farmer demands a higher income from the business and looks for other investment opportunities within the farm and elsewhere.

All three exploratory scenarios show a greater decline in the number of dairy farms than the baseline scenario. Furthermore, these scenarios lead to larger farms, which are larger and more intensive in the free market scenario, and more extensive in the nature-inclusive scenario. In the third scenario, where farmers do not only focus on maximum growth, the total milk production declines most severely.

A significant outcome of the study is the development of a model that predicts the effects of changes in economy, policy and investment behaviour on the structure of the dairy sector in cohesion. This model allows us to calculate new scenarios and circumstances.