More money for German dairies due to exports

Major milk processors in Germany will be bargaining for much more cash for their products from the supermarkets in the next six months, according to Dr Karl-Heinz Engel, CEO of the country’s second largest dairy group, Hochwald Foods. The main reason for the upbeat domestic market is the continuing success of export sales for German dairy desserts, yogurts and particularly cheeses.

In fact, Dr Engel announces that his dairy would be getting the equivalent of at least 4 cents more per litre from retailers as from the first week in November. He added that Aldi Süd, one of the country’s largest retailers of drinking milk, had already anticipated a much tougher market for milk in the first week of November by raising the average retail price of its pasteurised milk by €0.09/litre – representing an increase of just under 20% on the October price. In that month the wholesale price of butter also rose steeply in Germany: by €.10 per 250 g block. Dr Engel, also chairman of Germany’s Milk Industry Association (MIV), made it plain that his industry was not going to miss-out on the major chances seen in the growing export demand. He told milk sector leaders at the “Hochwald Future Forum for Milk” early November, that the industry was currently planning investment in added value dairy production of around €100 million. Like other major dairies, Hochwald is also expanding its capacity to meet the market with some 25 million kg milk to be added to throughput by January 2013. This year the dairy, based in Thalfang near the French border, collected some 2 billion kg of milk from some 5500 farmers in Germany, the Netherlands, Luxembourg and France. Annual turnover of the eight-plant processing group is put at around €1.1billion.