Adaptations in dairy farming required in the long term

Dutch dairy farming has undergone many developments in recent years. This prompted the Dutch organisers of the congress to ask for an overview of past developments in dairy farming and expectations for the future, based on studies already carried out and on six cases involving Dutch EDF dairy farmers.

Short term: survival

For the short term, the economic effects of the expiry of derogation and the introduction of buffer strips with their associated manure disposal costs play a very big role for many farms. For quite a number of farms, the short term will be focussed on survival - how to get through this period? For the medium term (2030-2035), several studies show that all the targets and tasks (nitrogen, climate, manure) seem impossible to achieve without shrinking the livestock population. The extent of the shrinkage needed is not really clear. The agriculture agreement mentioned 30%. The studies also show that economies of scale will continue. Whether farms will become more intensive or more extensive/more nature-inclusive in the medium term depends on concrete incentives from policy and possibly the market.

Long term: adapted dairy farming

For the long term (after 2035), it appears that adjustments are needed. Characteristics involved are:

• Dairy farming is focused on utilising grass and residual streams and converting them into high-quality humane food.
• Dairy farming minimises the use of feedstuffs grown far away and/or on land that is also suitable for growing humane food.
• Dairy farming is dignified for the animals. This includes allowing the animal to exhibit its natural behaviour.
• Dairy farming makes a positive contribution to (the restoration of) biodiversity.

Strategies of six Dutch EDF dairy farmers

For the report, the (future) strategies of six Dutch EDF farms were also portrayed. The entrepreneurs were asked whether they think they are ready for the future. First generally and then specifically zoomed in on a number of themes (expiry of derogation/extensification, climate targets, nitrogen/ammonia, biodiversity, animal welfare/animal dignity, future market demand, economic/financial). One entrepreneur says he is not yet ready for the future, the other five give positive answers in different variants.

How are these entrepreneurs addressing it? In general, these dairy farmers are in the lead in developing the strategy themselves. They really invest time to find out about developments in the environment, even though this is not always considered real work. A large part of the group calculates their plans themselves or at least makes sure they get the numbers right. The focus of most is on being among the best performers. The group also tries to look further ahead; the short term with, for example, high manure disposal prices is difficult for several farms, but they try to avoid letting this become a guiding factor in long-term decisions.

Right choice for the future

The report further describes the possible and different future scenarios, from the regular path of scaling up to shot and medium-term strategies. The researchers stress that to make a choice for one's own future strategy, it is essential to make a proper analysis. This starts with the entrepreneur himself: why are you a dairy farmer and what are your skills? Next, it is important to get a good picture of the trends in the environment, both in the immediate surroundings and in the market and society. The strengths and weaknesses of the initial situation (structure and performance) also determine the possibilities. From these building blocks, a choice for an appropriate strategy follows.

"The long-term challenges require adaptation of the dairy farming model," says Beldman. "It is a dairy farm that operates within a 'safe and just' space. This requires adjustments to the farm model and, in particular, to the earnings model. It is difficult to develop this model from the existing situation. It is important to work more from outside to inside (outside - in). What are the social demands and wishes and how can these be translated into a business and revenue model? An approach that fits this well is the approach of business model innovation," concludes Beldman.