Milram-Maker's Milk Price Boost: Farmers Gain in Germany
- Dairy farmers secure higher earnings - Milk prices ascend
Looks like Germany's big dairy player, DMK (also known as Milram), is raking in more dough after a rough 2023. They reported a post-tax profit of €24.6 million last year, nearly doubling the previous year's €13.2 million. However, their revenue took a dip from €5.5 billion to €5.1 billion.
The average milk price paid to farmers for 2024 was 47.31 cents per kilogram, including all average supplements and dividends. That's about 6 cents more than the 2023 figure. At the moment, farmers are earning 55.29 cents. With this, DMK has nailed its 2024 goal of offering competitive milk prices.
DMK had a tough time back in 2023 with escalating costs and slow demand for dairy products, especially cheese. These had to be written off, resulting in milk prices lagging behind other dairy companies. As a response, the company decided to reduce capacities at four locations and closed the Dargun dairy in Mecklenburg-Vorpommern, affecting 90 employees.
Originally based in Zeven, Lower Saxony, and administrated in Bremen, DMK processes milk into cheese, yogurt, drinking milk, and other food products at more than 20 locations across Germany. Most of these facilities are in Lower Saxony, with additional operations in Schleswig-Holstein, Mecklenburg-Vorpommern, North Rhine-Westphalia, Thuringia, and Baden-Württemberg.
Branding wise, they've got Milram, Humana, Oldenburger, Osterland, and since 2019, even Alete, the baby food brand, under their belt.
Now, for a sneak peek into the bigger picture, here's what's been happening with raw milk prices in Germany (and the EU) in recent times:
- Quite the Rollercoaster: Raw milk prices in the EU, including Germany, saw significant year-on-year fluctuations from 2023 to 2024. By December 2023, raw milk prices rose about 22.3% compared to December 2022[2]. However, when we look at November 2024 specifically, there was a less dramatic increase of 1.7% compared to the previous month[2].
- Impact on DMK (Milram): Higher raw milk prices increase DMK's production costs. If these increased costs are passed on to consumers, it could lead to higher prices for their dairy products. The company's ability to compete with other European milk processors will depend on how well it can manage these cost increases and adapt to changing market conditions.
So, while specific financial impacts on DMK in 2024 aren't detailed in the data, the company likely faced higher production costs due to increased milk prices. The outcome depends on factors like consumer demand and the company's pricing strategies.
- In efforts to maintain competitive milk prices for farmers and adhere to its 2024 goals, DMK (Milram) implemented vocational training programs to improve the efficiency of its operations.
- Despite the success of DMK in raising milk prices for farmers, the company faced challenges in 2023 due to escalating costs and slow demand for dairy products, particularly cheese.
- To tackle the issue of rising costs, DMK added vocational training initiatives as part of its community policy, aiming to boost the skills and productivity of its workforce in 2023 and beyond.
