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EuroDairy Workshop on Socio-Economic Resilience: “Dairy Farming in a Changing world”

Brussels, Belgium, 22 January 2019

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EuroDairy

Pan European Workshop on Socio-Economic Resilience: “Dairy Farming in a Changing world”

Brussels, Belgium, 22 January 2019

Submission date: 31 January 2019

Names of the responsible authors and organisations: Stijn Bossin, Innovatiesteunpunt

Dissemination level Public

Project deliverable

D6.5: A pan-European meeting on practical measures to improve socio economic resilience

About EuroDairy

EuroDairy spans 14 countries, from Ireland to Poland, and from Sweden to Italy, encompassing 40% of dairy farmers, 45% of cows and 60% of European milk output. EuroDairy is an international network to increase the economic, social and environmental sustainability of dairy farming in Europe. EuroDairy fosters the development and dissemination of practice-based innovation in dairy farming, targeting key sustainability issues: socio economic resilience, resource efficiency, animal care, and the integration of milk production with biodiversity objectives. EuroDairy is funded by the EU Horizon 2020 research and innovation programme under Grant Agreement No 696364.

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Contents

Background .................................................................................................................................................... 2

Objectives of the workshop ........................................................................................................................... 2

Format ............................................................................................................................................................ 2

Presentations ................................................................................................................................................. 2

Summation (André Le Gall, Institut de l'Elevage) .......................................................................................... 7

Exploitation of results .................................................................................................................................... 8

Acknowledgements ........................................................................................................................................ 8

Appendices ..................................................................................................................................................... 9

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EuroDairy Workshop Report – Pan European Workshop on Socio Economics

“Dairy Farming in a Changing World” Background

Socio - Economic Resilience is one of four themes being addressed within the EuroDairy project.

“Resilience”, from a farming systems perspective is “the ability of a system to withstand severe usually unpredictable disturbing forces”. Two elements of resilience are identified:

1. the systems’ resistance to the disturbance and 2. its rate and degree of recovery from the disturbance.

As such, a more resilient farming system is one that has a smaller reduction in productivity, as a result of a shock or disturbance, recovers more quickly and more completely than a less resilient system.

Dairy farmers within the EU have been exposed to both the positives and the negatives of price volatility since 2007. Further reform of the CAP and the abolition of milk quotas brought further changes, and potentially significant shifts in relative competitiveness between regions. Increased price volatility is bringing greater financial risks which will need to be managed. Dairy farmers need new tools and strategies inside the farm gate (as well as at policy and market levels), if they are going to manage the impacts that extreme volatility can have on the business.

Objectives of the workshop The goal of EuroDairy is to identify and promote farm-level solutions and strategies to deal with these shocks.

The scope of this workshop was to bring together expert thinking, experience and practice from across Europe, providing insight into:

characteristics of resilience

resilience at farm level

resilience through the supply chain

drivers and enablers of greater resilience.

Format The workshop consisted of expert presentations followed by question and answers. A list of the 71 participants, from 14 countries is given in Appendix 1.

The workshop resulted in very constructive and well-rounded discussion of the issues – on farm characteristics from an experienced consultant, advisors on farm level tactics, the perspective of the farmer and of the supply chain (Danone) and finally from the chairman of Ceja on policy demands for the younger generation of dairy farmers.

A copy of the workshop agenda is given in Appendix 2.

Presentations A PDF copy of all the formal presentations is given in Appendix 3.

Ray Keatinge opened the workshop, providing the background of the EuroDairy Project, the relevance of the topic socio-economics and setting the scene for an inspiring and constructive workshop.

Ray mentioned that that there is need for sustained profit - to generate a viable family income, reinvest in the business, and create conditions to deliver on the expectations of wider society, for example, on environmental objectives.

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4.1 Framing the main challenges of the European Dairy sector André Le Gall, Institut de l'Elevage André started with setting the three main challenges for the European Dairy Sector. These are:

economy (competitiveness)

environment

social (Antibiotics, labour, etc.)

Economics:

Since the end of quota, there has been a 10% increase of EU milk production (13 m tons of milk extra since 2014), and an increase in milk price volatility.

There are large differences in cost price/litre of milk between EU countries, depending on mechanisation, feed cost, soil, climate etc.

To deal with this volatility a farmer can become more competitive in quantity (cost price, production/cow), can go for quality (labels, trademarks, etc.)

Another strategy to deal with this volatility is differentiation - differentiation to add value and quality to your product e.g. Quality of dairy product is perceived to be higher with only grass fed, instead of TMR fed production.

Organic milk is 3% total EU production and demand is rising.

Non-GMO milk is growing exponentially in Holland, and in neighbouring countries, but is there sufficient non-GM feeds available.

Environmental issues:

In Europe there are very good climatic conditions to grow grass/maize - more than 210 growth days in milk producing regions. However, climate is changing, and dairying need to adapt to the changing climate, e.g. Summer 2018 was an example of climate change - an extremely dry year.

Dairying is also responsible for carbon emissions, it has a carbon footprint close to 1 kg Eq CO2 / kg FPC Milk.

It is a challenge for the dairy sector to reduce this impact.

Nitrate and Ammonia remain a challenge for the dairy sector. There is a lot of progress, but some hotspots are still significant.

However, dairy is important for landscape management and contributes biodiversity benefits, through hedges and other landscape elements.

Social and societal issues (Labour, attractiveness, welfare, antibiotics, etc.)

There is the competition between animal feed and human food: A new perspective is that the transformation of non-edible proteins such as grass is good, as it is converted into meat, eggs, milk which are edible by humans.

Still quite a challenge for European dairy farmers is the evolution from a family enterprise to a large business, with challenges of management, personnel, work organisation, succession, etc.

A big societal issue is animal welfare, a roadmap is needed for the whole chain with simple indicators that are accessible to farmers – a project like that is made in Belgium called Happy Cow, Happy Farmer.

Dairy farming of tomorrow: low production costs, good environment, ethical and social performances, sales and surcharge through labels etc.

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4.2 Characteristics of resilience Steffi Wille-Sonk, European Dairy Farmers – Lessons from EDF dairy farm costings

Steffi started with an introduction of EDF. EDF is a club of dairy farmers where dairy business results are benchmarked, and farmers come together to discuss performances and exchange knowledge.

What is resilience?

Figure 1: Different States recovering from shock

Resilience: is to recover quickly from a shock, absorb the impact or avoid shock

Potential shocks can be low milk price (but that is expected, not really an unexpected shock), climate events (drought, flooding, etc.) or diseases.

From the EDF figures: organic and conventional farms generally cannot cover production costs without the direct payments.

Many dairy farms are not profitable or not resilient from an entrepreneurial perspective, even in 'good' years.

The wages of the entrepreneur are to low

the decoupled direct payments are an irreplaceable part of the farm income

not sure what prospects there are for succession.

But, apparently they are ‘resilient’ enough because they keep going.

Steffi’s tips & tricks to resilient farming:

Low cost is crucial to make a profit! But these are not necessarily large farms! Small ones can be equally good and resilient! It is also not the case that this is land bound, Irish farms have lower milk yield but also lower costs, there are Swedish farms that are just as resilient

A resilient farm makes a profit over e.g. 10 years, on average every year a profit (without direct payments)

A high milk price does not necessarily result in a higher yield. Cost control is always the most important.

A good barometer of resilient is the farms has a long-term future through a willing successor.

Ask yourself: do I want money to live on, or do I want a reward for my entrepreneurship?

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4.3 Resilience at Farm Level Elisabeth Castellan, Farm resilience tool Elisabeth worked with a group of dairy farmers on the theme of resilience. This was a completely new approach

with the focus on five topics:

Strategy

Human factor

Social expectation

Economically

Environment

With them and for them she developed a tool: “Outil 2 mains”, which uses a questionnaire to take feedback from

the farmers about these five topics related to resilience. The results are presented in a ‘view’. This ‘view’ allows the

farmer to detect different pinch points, and let them benchmark among colleagues.

Figure 2: Outil 2 mains

Susanne Peystrup, Advisor - Lean thinking, lean management Lean manufacturing or lean production, often simply "lean", is a systematic method for waste minimisation within a

manufacturing system without sacrificing productivity. Lean also takes into account waste created through

overburden and waste created through unevenness in workloads. Working from the perspective of the client who

consumes a product or service, "value" is any action or process that a customer would be willing to pay for.

Lean manufacturing makes obvious what adds value, by reducing everything else (which is not adding value). This

management philosophy is derived mostly from the Toyota Production System (TPS) and identified as "lean" only in

the 1990s. TPS is renowned for its focus on reduction of the original Toyota seven wastes to improve overall

customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from

a small company to the world's largest automaker, has focused attention on how it has achieved this success.

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8 types of waste

Defect

Overproduction

Waiting

Non-utilisation of talent

Transport

Inventory

Motion

Extra processing

Tools

Value stream mapping

Spaghetti diagram

Mapping milking robots

Mapping in the production

Mapping mixing feed

Standard Operation Procedures

White board

Goal management

- …

Figure 3: Standard Operating Procedures

4.4 Fostering Resilience through the supply chain Roger Hildreth, EuroDairy Pilot farmer and Arla supplier Roger started by describing his farm in York (Curlew Fields Farm, 110 cows 170 ac, family partnership, ongoing

building, three trucks tour, USA, profit / cow place, benchmarking)

Roger invests a lot in the genomic improvement of his herd.

Roger is also part of the Arla / Asda 1.5 Group. The goal of this group is to produce 1.5kg f+p/cow/year, reduce

transport / processing costs, gain efficiency and cascade knowledge down to others in the Arla pool of farmers.

Roger talked about Open Farm Sundays, which is a great initiative to bring consumers to the farm and give them

insights on dairy production.

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Cees Jan Hollander, Global Farming Expertise Manager Danone Danone has been in existence for around 100 years, 52 of their products are essential dairy and plant based.

Danone works together with farmers to improve carbon footprint. They do this by using the CoolFarmTool. To improve Animal Welfare. They have written an Animal Welfare Position Paper in 2016.

Danone help their farmers achieve these goals by offering toolboxes for best practices, or setup local projects together with partners.

Nicolas Chabanne – Founder Participatory Milk This speaker was not present

4.5 Drivers and enables of greater resilience Jannes Maes- President of the European Council of Young Farmers

Jannes is President of Ceja, European Council of Young Farmers – the voice of Europe’s next generation of farmers to the European institutions.

But Jannes is also a Dairy Farmer. He described that his farm is not only a business, but also a place for family and a place for the local community. The economics are important, but also social issues are very important. There are tools that can help the farmer with these economic and social expectations. In his opinion, resilience means that the business is ready for what is to come in the future. Knowledge is very important, but the supply chain is also. Every dairy farmer is a link in the supply chain and it is the responsibility of the entire chain to get ready for the future.

His advice on being a resilient dairy farmer:

Training / knowledge (show that you are capable technically and economically)

Not only passion

Being critical

Work together -Share data

Spread risk through the chain – if you spread risk, they disappear

Good advice on farms

SWOT ANALYSIS !!!!

There is still a future for dairy farmers. It is up to all players in the chain to improve the conditions for all.

Summation (André Le Gall, Institut de l'Elevage)

Deal with challenges of dairy sector (economic, environmental, social and societal) in order to put more value on dairy

First results of EuroDairy pilot farms, with nice understanding of farm profitability: not a question of size or milk production/cow. Good results are possible with low inputs or high input systems (“question of details”)

Lean management applied to dairy farming: concepts, 8 types of waste, tools including mapping for discussion groups

"Deux mains"/"Two hands": a tool to sensitise farmers to resilience with a global approach (economy, social, environment, etc.)

From farm management (efficiency, MS, etc.) to dairy segmentation (global and retail trends) and communication

Dual project => Health mission => One planet, one health mission. Need for transparency and trustful relationships with farmers. Co-building solutions with farmers on issues such as Carbon and animal welfare. Articulation of different incentives.

Important to follow up on markets, to be connected to the World, food chains, Society, but also to one’s own family.

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Exploitation of results The outputs of this workshop will be reported on the EuroDairy website www.eurodairy.eu, and will be published in Boer and Tuinder (farmers’ magazine in Belgium). The most important points from the presentations and subsequent discussion will be incorporated into the final project report, and key messages and recommendations will be communicated to the EU Commission.

This activity augments other outputs from the EuroDairy project, such as webinars and technical leaflets on issues related to Socio-economic resilience, which can be accessed via the project website.

Acknowledgements EuroDairy is funded by the EU Horizon 2020 research and innovation programme under Grant agreement No 696364.

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Appendices

Appendix 1: List of attendees

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Appendix 2: Workshop agenda

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Appendix 3: Formal presentations

10:30 – 10:40 EuroDairy – Aims and Objectives Ray Keatinge, Agriculture & Horticulture Development Board

10:40 – 11:00 Framing the main challenges of the European Dairy sector André Le Gall, Institut de l'Elevage

11:00 – 11:45 Characteristics of resilience Steffi Wille-Sonk, European Dairy Farmers – Lessons from EDF dairy farm costings

11:45 – 12:45 Resilience at Farm Level

- Elisabeth Castellan, Farm resilience tool

- Susanne Peystrup, Advisor - Lean thinking, lean management

14:00 – 15:30 Fostering Resilience through the supply chain

- Roger Hildreth, EuroDairy Pilot farmer and Arla supplier

- Cees Jan Hollander, Global Farming Expertise Manager Danone

15:30 – 15:50 Drivers and enables of greater resilience

- Jannes Maes- President of the European Council of Young Farmers

15:50 – 16:00 Summation and wash-up

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