The next generation at EDA

There is a lot of talk about generations in food and dairy. Often, the various segments, such as boomers, Gen X and Gen Z are spliced up and discussed, but for the European Dairy Association (EDA), it was about what the next generation is, both in personnel and trends. Giuseppe Ambrosi, president of the EDA, said he thought the convention theme, “Next generation EU dairy,” was a call for action.

Key issues for the sector include the reduced EU milk pool, trade disputes in other sectors that have spilled over into dairy, and wars and geopolitical tensions all over the world, along with an outlook that states the EU milk prices will be structurally higher than the world milk price due to environmental legislation, he noted.

“We will have to ask ourselves if we need a radical new thinking in Europe and in the European dairy industry: on how to shape the European lactosphère of the next generation, on how to nourish the future of our industry in Europe, in order to stay in the pole position we are in today as the global dairy superpower,” Ambrosi pointed out.

He called for radical new thinking and observed, “We as European dairy, we have a strong basis to build the future of our sector; we make Europe richer; we add value and we make a difference in quality, in safety and sustainability.”

Paolo Zanetti, president of Assolatte, asked that the EU not destroy a key sector such as dairy, noting, “We make incredible products sold all over the world, and we should be very attentive on a European level, as a leader in the production of milk worldwide.”

The European dairy sector continues to show resilience despite pandemics, wars, and inflation, he stated. “Increased global demand for animal protein and high nutrition products means there is a tremendous growth opportunity.” That being said, he warned there is a wave of extreme animal activists, who are pushing for reduction of livestock numbers, along with demands for nutrition labelling that impacts dairy goods unfairly. “There is a heritage of skill and tradition, to be preserved and invested in. It is an enormous responsibility, so let us not make the mistake of allowing other countries that came to the field later, to surpass us in benchmarking dairy production.

“We as Europeans are imposing taxation on electric cars in China, and they’ve put investigations onto our agricultural products. We are tired of being at the centre of political disputes that do not involve us,” he noted of the China-EU trade wars currently ongoing.

Farming to the centre

Francesco Lollabrigida, the Italian minister of agriculture, food sovereignty and forestry, said it was important to put agriculture at the centre, not just of the economy, but as a value, to fight against climate change, and to promote the concept of well-being.

“We are for free markets, in which we can have competition. Why do we want it? We’re not afraid, we’re strong and aware of our value. It is very important to talk about competition based on rules that are equal. At times, EU environmental regulations are too stringent and not working, and we can’t have competition versus people who don’t respect these rules. For Italians and EU, quality is key, and we must prevent the risk of duties that can harm our market.

“The dairy sector is a strategic sector, and we can use it for economic growth to other producers. For European growth, we need to acquire awareness about the mistakes made in other sectors, and think on a European level, and not be isolated. We are willing to do our part.”

Herbert Dorfmann, an Italian Member of the European Parliament, and “friend of dairy,” as EDA secretary general Alexander Anton described him, explained he “strongly believes the war against climate change needs to be part of our job. Agriculture is the most affected sector with climate change.”

Next, he says there is a need to work inside the European Parliament to see “how we can work better in the supply chain in Europe, so dairies have sufficient income. If we don’t guarantee this, they won’t produce milk anymore because they won’t be able to. The greatest challenge is to attract young people to agriculture. If we are not competitive or interesting, nobody is going to work with us. We need to guarantee that young people have the same income as those that work in other sectors. We need to guarantee that the money is going to people who work in sustainable agriculture.”

Dorfmann said he is a “bit concerned with the increasing political climate on trade, as we are always very trade friendly, and accept imports from outside if the conditions are the same as the EU. Production methods outside the EU may not be 100 per cent, but if you ask for 100 per cent, you’re going to block trade. It’s a complicated debate.”

Another issue is animal husbandry, with him noting the last five years have seen heavy attacks on raising animals in Europe. “I am convinced that animal husbandry, done sustainably, is not harmful for the planet, and consumers need to understand this. There is a clear relationship between animals and our land. Consumers need to understand that bovines can transform poor quality proteins into high value products. There are a lot of places where there is no alternative at all to animals, as farmers can’t grow other products there.

“We also need very clear communication on labelling. We have a labelling system in the EU that is becoming harmful for animal products. The traffic light systems are too simple and too superficial.”

Preservation

Emmanuel Besnier, CEO of Groupe Lactalis, said he is proud of the transformation of the dairy industry in Europe over the last 30 years. “However, we need to preserve competitiveness, we have leadership in Europe, and Europe needs to choose the right markets, to continue to be a major actor in exports,” he observed. Another issue is consumer demand, he said: “We need to answer the needs of the consumer, who is asking for a lot of quality, and may also have problems we need to solve. We also need to avoid the demonisation of dairy products. There is a fragile balance in the supply chain, so we need a political solution that is good for everyone and where the interests of the agricultural sector are preserved.”

New technology should be used, so companies can improve products and projects along the supply chain, Besnier noted. “It’s all about decreasing the carbon footprint. We can offer the right measures on climate change, but we need to do something, and the EU needs to concentrate on an inner market that is harmonised, and allows us to have great success. Together we are better.”

Dairy deliveries

A panel made up of four heads of dairy companies asked, “What does dairy deliver for the next generation?” Pat Murphy, CEO of Kerry Group, noted there are “tremendous opportunities for dairy over the coming years. There are challenges facing us for sure, with imports from other countries, and have to educate the consumers around the quality, nutrition in European dairy. We also need to work together in a collaborative fashion to try and get technology adopted by primary producers. Innovation is the future for our business, to try and get away from commodified products.

“Farmers need more time to implement the technologies. Without a good strong dairy industry in Ireland, we have not much else, and we can’t afford to mess that up over the coming years.”

Gianpiero Calzolari, president of Granarolo, said, “In Europe, we have all the conditions for added-value in the strength of our food traditions. Made in Italy is the basis of international markets. A planet has to produce safe and quality foods in the right quantities. We do have the agricultural culture that is needed to be the first protagonists of this move. We also need to have the politics that supports this.

“The industry is grounded in the soil, but it needs to add innovation. There is a lack of attractiveness to the younger generation, and we need to grant to young people the tools that their colleagues in other sectors already have. It is about digitalisation of our enterprises, with a special training path for the younger generation. Work needs to be rewarded, or otherwise we’ll have a wonderful product without the generation that cares to implement it.”

James Neville, CEO of Volac said it was about “how do processors get more money for the milk? It’s about investing in trends like destocking, with more milk from fewer cows, genetics and nutrition making the best use of non-human digestible feeds. It’s not about how to play the old game, but instead to consider what the new game is.”

In the UK, he said, dairy farmers are feeling under significant pressure, but larger milk buyers say they have never paid so much for milk, and farmers should have it good. “It’s about finding ways to pay for capital investments. Whey and dairy protein is the highest quality protein you can get, and the ageing global population is providing a growing market.”

Jan Vreugdenhil, director, Vreugdenhil, the largest milk powder producer in Europe, opined the future was about convincing the consumer. “We make the most beautiful products in the world, but how do we translate this in competitiveness?” He also said that it was not a level playing field in the Netherlands, as there was big pressure for fewer cows. “The government is pushing towards fewer farmers, but this does not help efficiency, and we have to look at sustainability. How do we look at this for the future?

“It surprises me that we have a very small footprint for milk, but we don’t talk so much about it. By reducing the number of cows in areas where the footprint is low, we are exporting problems to other regions of the world. How are we saving the world by reducing the number of cows in Europe?”

At the end of the day, he said, “We have to trust the process. When transforming grass into a product, milk is a miracle. For the security of supply and food, we need to trust that we are there for the future – to supply the products to the rest of the world, we have to do some forward thinking.”

Denmark’s taxing times

Esben Egede Rasmussen, managing director of the Danish Dairy Board, discussed the carbon emission taxes that are being enacted in the country. Denmark has 2,312 dairy farms, with 547,000 cows that produce 5.7 billion kg of raw milk per year, of which 80 per cent is exported to around 175 countries around the world. Today total production is a bit less, but with about five times fewer cows. The tax is starting in 2030, and dairy is already working hard to improve sustainability, he observed.

In fact, the agricultural sector opted to engage with the government, in order to get an emissions reduction of 55 to 60 per cent, versus the 70 per cent as originally proposed. “It is still a massive challenge and the whole industry, and dairy businesses have been bracing for the impact. There was massive media pressure on agriculture and criticism of the farming community, due to its perceived lack of action and interest. In negotiations, it was about trying to get to a platform where you can run your business in. At the low end of the tax model, below the threshold, there will be no tax, so there may be a chance to become so efficient, farmers won’t be hit by the tax in 2030. The farmer is the ultimate renaissance person, as they need to know about everything to work today.

“This will change the Danish dairy industry over the next 25-30 years. It is an example of the dairy industry taking responsibility for the issue out there, and choosing to be part of the solution rather than part of the problem, with a science based model.”

In response to a question from Piercristiano Brazzale asking why Denmark accepted this approach, Rasmussen stated, “The idea of a tax is not coming from Danish dairy farmers. It was more a question of damage control, and to escape tax by using all the means available so that we don’t have to pay a tax. There were a lot of arguments put forward, but the political realities were as they were. We have had to accept the democratic process, where the majority can make stupid decisions, and Denmark is not the only place where this happens.”

Ambrosi concluded the conference by noting, “We have a positive presentation for the future. There are a lot of challenges in front of us, but with our usual energy, we will solve the problems and look at the future in a positive way.”