Swiss report on milk volumes

The year 2017’s Swiss milk volume amounted to 3.43 million tons (about the same as in 2016), according to the Agricultural Report 2018 from the Swiss Federal Office for Agriculture. Organic milk accounted for 7.6% of total milk marketed (6.8% in the previous year) and 30.9% of the milk came from farms with non-silage feeding (30.4% in the previous year). Around 91,000 tons (2.7%) of the marketed milk was produced on summer farms.

In 2017, year-round dairy production operations sold 3.32 million tons, while summer seasonal farms sold about 91,000 tons of milk. About 38.3% of milk producers marketed less than 100,000 kg of milk per year.

Their share of total production amounted to 14%. Dairy farms with an annual production in excess of 350,000kg produced 27.1% of total marketed milk. There were 653 companies in 2017 that marketed more than 500,000kg, compared to 608 companies in 2016.

In 2017 the Swiss federal government continued to set an allowance for milk of 15 Rp/kg milk and a supplement for feeding without silage of 3 Rp/kg milk. As in the previous year, CHF293 million was spent on both dairy supplements. The government spent just under CHF2.5 million on the administration of milk data and information technology in the milk sector.

The Federal Office for Agriculture (BLW) has concluded a service agreement with TSM Treuhand, which will expire at the end of 2021. The TSM is responsible for collecting and testing data on milk production and utilisation.

Milk processors have to report this data on a monthly basis. The TSM is responsible for ensuring that the reporting requirement is met. If this is not the case, it sanctions the affected farms and businesses. The TSM prepares the payout of the allowances on the basis of the reported milk recovery data. This payment information is sent to the BLW twice a week, which then pays out the allowances to the milk producers for the benefit of the producers.

According to the milk price support ordinance, Swiss milk processors are obliged to pass on the allowances received within one month to the producers from whom they have bought the milk processed into cheese. The allowances are to be shown separately in the billing for milk purchase for the producers. Also, milk processors must identify the received and paid allowances in their bookkeeping.

In the year under review, 2263 dairy farmers received a total of CHF 93 million in milk allowances, which corresponds to an average of around CHF129,000 per milk recycler. The distribution shows a concentration of the supplements to a few large milk processing companies: 20% of the milk processors received about 95% of the milk allowances.

In addition 1,392 or 60% of the processors received an annual amount of no more than CHF10,000. These were predominantly summer farms with their own cheese production. The paid caseload allowances amounted to CHF 4.8 million for this size class.

In 2017 there were 10,668 farms in the valley area and 9,689 farms in the mountain area with milk production in Switzerland. Compared with 2016 the number of dairy farms has fallen by 3.5% or 733 farms. In addition, milk was produced on 2,189 summer farms in the alpine season. The marketed milk volume per summer farm reached an average of around 41,665 kg.

In the contracts the milk must be subdivided into milk segments A, B and C according to their purpose. Milk quantities and the prices per segment must be shown separately on the milk bills.

The A-milk segment covers value-added products with border protection or support (allowance for milk sales, raw material price adjustment). B-milk covers dairy products with limited added value without border protection or support for the domestic market and export, and C-milk covers low-value products for the world market.

There has been an important change compared to the previous standard contract for BO Milch. Milk buyers must notify their seller by the 20th day of the month of the conditions of quantity and price for the next month. Thanks to this supplementary rule, the milk vendors – and in particular the milk producers – have a more binding basis for deciding on any adjustment of milk volumes or a change in the sales channel. On the basis of the provisions of the Agricultural Law, the Swiss Federal Council cannot declare any provisions for price and quantity determination generally binding. In any case, this must remain in the competence of the contractual partners.

Milk distributors and milk processors are also obliged to report the purchased and sold quantities of milk per segment as well as the milk products produced and exported with milk from the B and C segments to TSM on a monthly basis.

According to analysis of the first milk purchased in 2017, 84.6% of the milk was marketed in the A segment, 14.5% in the B segment and 0.9% in the C segment. The shares thus remained practically unchanged compared to 2016.

At the end of each year TSM verifies that the quantities of milk purchased in the B and C segments are in line with the quantities of milk sold in the B and C segments and the manufactured and exported milk products. In the case of deviations of more than 5% per segment for the period of one year, BO Milch may impose sanctions.

In 2017, TSM reviewed 21 milk processors to see, if they used the milk bought in the B and C segments in 2016 for the manufacture of permitted products. There were six cases of processors for which the TSM found deficiencies and these were forwarded to the BO Milch office for review. All cases were closed in the summer of 2017 with the BO Milch taking measures against a milk processor.

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