Feature: Dutch demand for cows surges after EU lifts quota

Pieter de Vries, trader of dairy cattle in Lelystad, capital city of the Dutch central province of Flevoland, feels like he's running a call center these days. For every batch of cows he puts on sale he gets around twenty calls - much more than usual.

The 33-year old, who also manages a dairy farm, deals in imported Danish Jersey cows. Compared to the same period in previous years, hundreds more were sold in the months leading up to April 1, the date when the European Union (EU) lifted the quota that put a cap on the milk production for 31 years.

In anticipation thousands of Dutch dairy farmers expanded their farms. "It's a mad house. There's an incredible demand for cows at the moment," said De Vries.

MORE COWS

The number of cows of two years old and above increased by almost 3 percent compared to one year ago, according to Dutch government figures. These cows could produce milk, but could also be used for meat.

Auke de Haan, chairman of the cattle trade section at Cattle and Logistics Netherlands, said that in the first months of this year the demand for heifers gradually increased. Heifers are young cows that have not given birth yet.

Cattle and Logistics Netherlands is an organization that represents over 60 percent of Dutch livestock traders and transporters.

"It began early this year and every month the demand increased. Since April the demand is flying through the roof," he said.

The increase comes as no surprise to those who've watched how thousands of Dutch farmers expanded their farms in the run up to the lifting of the milk quota.

Members of Royal Friesland Campina, a dairy cooperative that represents around 70 percent of the 18,600 farms in The Netherlands, are estimated to expand their farms by 10 to 15 percent, said its CEO Cees't Hart.

"They were longing for this for quite some time. For them it is liberalization," said Cees't Hart of his cooperative's members.

But he added that there is a ceiling to the production of milk. "We've calculated that the ceiling will be 15 percent above the 2013 figures. That's around 2 billion kilos and that will be the limit," he told Xinhua.

Local environmental laws determine this ceiling. For instance, farms have to dispose of their cows' extra manure on their own land. The amount of manure per hectare is limited, because of the phosphates it contains. Also, the square kilometers of farmland available in The Netherlands are bound.

HIGHER PRICES

Prices of heifers have shot up in recent months, many cattle breeders and traders told Xinhua. Heifers were about 1200 euros in 2014 and now sell for up to 1800 euros depending on their quality, said Dirk-Jan Schoonhoven, head of the Dutch Dairy Farmer Union, which represents 2000 of the 18,600 dairy farms.

"After the abolishment of the quota prices really went up. Especially heifers that were calving in April are very much in demand," said Schoonhoven.

The price hike of heifers is temporary, but last year's prices are unlikely to return, said Pierre Berntsen, director agricultural companies at ABN AMRO, a local Dutch bank.

"They will remain pricy. There is an interest in milking. The market looks good and entrepreneurs are getting ready to expand," Berntsen told Xinhua. But he stressed that the increase in milk production is modest, 3 percent this year.

De Vries expected that business would slow down in a few months. "Then most farmers who want to buy heifers will have bought them then and the madness will be over," he said.

LESS MEAT

Not everyone is happy with the local demand. Exporters have a tough time in finding suitable heifers for their clients because of the high local demand, said Erik Gostelie, director of Veepro, an information center for Dutch dairy cattle.

"This is not something that we're used to. In the past year we've exported about 45000 heifers, but at the moment they're hard to find. Some animals are imported from abroad, but it's cumbersome," Gostelie told Xinhua.

Also slaughterhouses face a decrease in beef supply. Jan van Westreenen, managing director of van Amsterdam Meat Company, a slaughterhouse that specializes in beef, said that the supply dwindled by 20 to 25 percent.

"We have less supply because farmers extend the life cycle of their cows. They milk them longer now that the quota is gone and they're no longer fined for producing too much milk," said Van Westreenen.

He added that the purchase price per kilogram cow increased by 20 to 25 percent.

Jan Pieter Dam, who transports cows to slaughterhouses, also noticed a dip in the supply. "I think it will stay quiet for a while," the 45-year old sporting a blue overall said, while he readied his truck besides the cattle market hall in Purmerend. Endit