Post by Torsten Hemme

Cross country comparisons = a great source for insights and questions. Here: WHATS WRONG WITH PROGRESS IN GERMAN DAIRY FARMING? The chart below describes the development of the average fat content in milk produced by farmers in Germany and the USA. The time frame is from 2000 - 2025. The data are based on IFCN Dairy Research Network, the year 2025 is based IFCN data Jan - Aug. THE WHAT - the key findings: 1. GERMANY fat content show a steady declining trend overtime. In the USA fat content is sky rocking since 2016 (+ 15%) and is now higher than in Germany. 2. BUTTER PRICES: From the year 2016 the world market prices for butter have doubled while skim milk powder prices remained nominal stable. In 2025 the value of one litre of milk is driven by over 50% by the value of milk fat. In 2015 the value of milk fat contributed to only 33% of the value. 3. ADAPTATION: In the USA dairy farmers have adapted to the shift in fat/protein values of milk and via that activated two growth engines: a) Volume: More milk components without more cows b) Value: More milk components which have the highest value SO WHAT - What drives for the different patterns in the two countries? 1. USA dairy farmers get more incentives by dairy processors and the systems how to price milk by fat and protein. 2. USA dairy farmers just adapt faster than farmers in Germany based on a) willingness b) skills c) farm size d) technologies, e) better genetics/genomics.... Please add your view in the comments, I am really curious NOW WHAT - Where is the opportunity In the USA most of milk growth was coming by increasing fat and protein content. Moreover the faster growth of milk fat solids has closed the supply demand imbalance within the USA. USA has traditionally a high milk protein surplus to be exported. Germany can at current level of prices for milk fat and protein benefit from activating the two growth engines like the USA is doing since 2016. This will have a volume growth effect by more milk solids without more cows and investment in new barn capacities. Moreover it can have a significant value effect by producing more from what is at the moment values at very high prices. I am excited to present this slide next week at the NORLA Exhibition in Rendsburg, Germany on a panel with Marcel Goffinet; Arla Foods Kerstin Wriedt; Initiative Milch, Klaus Peter Lucht, Bauernverband Schleswig-Holstein Thanks Philipp Goetz and IFCN for sharing these great time series of data. It has an immense value to have fast access to data which are consistent over time, comparable between countries and up to data as yours! Thanks Corey Geiger and CoBank for your research and linkedin posts on this topic.