Proposals & programmes for our dairy farmers
In recent years, the volatility of raw milk prices in Europe has increased significantly. There are extreme market fluctuations, which are also to be expected in the future, meaning market developments are still difficult to predict. These developments in the dairy market are creating liquidity risks for farmers who want to minimise risk and increase predictability and liquidity security on the farm.
To make this possible for our farmers and to support them in their daily work and farm planning, we have developed various proposals and programmes as a milk-processing cooperative.
Fixed price – a model for fixed price hedging
With fixed price, DMK has developed an easy-to-use and secure model for hedging fixed prices, which can help with risk minimisation and liquidity hedging and results in greater predictability. Participants have the option of securing a part of their milk volume at a fixed price up to 12 months into the future via an online platform. The price hedged there will then replace the DMK basic price for the hedged milk quantity in the corresponding month. Companies do not have to trade independently on the stock exchange. Instead, DMK takes care of hedging the fixed prices. Thanks to professionally prepared and easy-to-understand information and an easy-to-use platform, participants can easily find their way around and do not need any expert knowledge.
What advantages and opportunities does the model offer?
The fixed price hedging offers more planning security by hedging against market fluctuations. Model participants know when to expect what income in advance. It reduces the individual company’s liquidity risk, which also has no liquidity burden after hedging—in contrast to direct trading on the stock exchange. In addition, the trading dates help participating farmers gain insight into how valorisation develops. Thanks to the straightforward security system, the process is simple for participants. You can make independent, autonomous decisions, thus actively participating in market events. However, the objective of fixed price is not to achieve maximum prices. For the first time, farmers will be given the option of independently setting a milk price for the next few months for part of their milk volume.
How does the hedging model work?
This is what our farmers have to say
Real opinions about the fixed price model
Our Milkmaster programme
The German dairy industry is highly respected in society. Nevertheless, it’s also under critical observation by the public, particularly in the areas of farm animal welfare, feeding and animal health. That’s why we developed the Milkmaster Programme. It sets out not only our standards for responsible milk production, but also concrete goals. With Milkmaster, we are responding to the social debate and taking accountability for our actions.
“The Milkmaster Programme is doubly worthwhile for us: On the one hand, it's important that our animals are looked after as well as possible and that we consider the environment, on the other, the bonus programme gives us urgently needed income on top of the milk price.”
Jan Christian Nissen from Achtrup, North Friesland district
Visit the Milkmaster Farms.
DMK opened two Milkmaster Farms in 2015 to promote internal and external dialogue. The farms showcase the work that DMK dairy farmers do every day, and how the Milkmaster Programme works in practical application.
The two Milkmaster Farms have professionally equipped meeting rooms and can be visited by customers, vets, feed consultants, NGOs, the media and DMK employees.
The building-blocks of the Milkmaster Programme.
Milkmaster consists of 5 building-blocks, which holistically promote responsible milk production.
The Milkmaster-Code sets out basic and specific standards, rules and objectives to which the milk producers are jointly committed. . The Code thus serves as a guiding principle for responsible milk production. Not only are daily actions and activities guided by it, but also all decisions with relevance for the future. It provides farmers with orientation and society with answers to its questions.
The code, which is divided into 4 chapters, covers all areas of responsible milk production, from calf rearing, feeding, fodder cultivation, environmental and climate protection to work processes on the farm.
The Milkmaster Report is systematically derived from the Code. The aim is to make the standards for responsible milk production measurable and verifiable. It demonstrates a transparent and meaningful documentation of all farms It offers the farms regular reports on their individual situations and progress, including benchmarking with other farms. This forms the basis of individual advice on improvements for every farm.
Put simply, it is a comprehensive questionnaire that picks up on the individual topics (chapters) of the Code and attaches 148 ratios and a defined percentage points-based scale to them. Just under 5,800 dairy farmers or 83 percent took part in the Milkmaster self-assessment in 2017. This corresponds to 96 percent of the milk volume. 77 percent of the dairy farmers with 94 percent of the milk volume participated in the previous year.
On the basis of their self-assessments, the dairy farmers receive an annual report on their results with an in-depth analysis of their own performance compared with that of other dairy farmers. Every two years, every dairy farmer is subjected to an announced audit conducted by an external, independent and accredited certifying company. The data from the self-assessment in the Milkmaster Report were tested. This confirms compliance with the standards that we have agreed in the Milkmaster Code.
By 2018, all the dairy farmers involved had been audited on schedule, around 6,800 audits were performed between 2016 and 2018.
The continuous further development of our farms is a central feature of Milkmaster. The advice module is intended to provide support for this in all the areas of Milkmaster. The advice comprises precisely tailored optimisation strategies for all farms.
The DMK consultant will answer all questions about milk quality and milking hygiene. A network of specialists, including vets, specialist consultants and scientists, is being built up to provide specialist advice on Milkmaster topics, for example udder and hoof health, shed architecture, environmental protection and resource efficiency. Specialist forums and online seminars support the advisory process as an information platform.
Milkmaster uses a bonus system to reward the work of dairy farmers who perform especially well in cow comfort, animal health, feed cultivation, feeding and milk quality with a cash premium.These topics include, in the cow comfort section, the loose housing system with a specific area for calving or the isolation of sick cows, in animal health, threshold values for somatic cell counts and lifetime yields, and in feed cultivation, the use of certified soya. The bonus is linked to specific important ratios. These include topics from DMK 2020 such as cow comfort, animal health, feed cultivation, feeding and milk quality. The bonus is intended as a reward for those farms that fulfil certain requirements on responsible milk production. At the same time, it is intended as an incentive for all farms to develop further and achieve the goals we have set forth together in the Milkmaster Code.
In the amount of 26.5 million euros for the period from 1 January to 30 September. They amounted on average to just under 0.6 eurocents/kilo of milk, The Milkmaster bonus for 2016 came to a total of 33.6 million euros and in 2017 42.6 million was distributed.
Agri climate check
The global goal is to reduce or stop the speed and effects of global warming, to reduce the emission of greenhouse gases that are responsible for climate change and are released in large quantities in agriculture, among other things.
From 2022, ‘Agri climate check’ will therefore be included in DMK’s Milkmaster programme and will be relevant for DMK farmers as a bonus. It uses 17 criteria to calculate CO2 offsetting for dairy farms based on the calculation standard for offsetting individual farm emissions. Participation is straightforward—via integration on DMK’s online platform www.myMilk.de, where farmers answer relevant questions. In addition to the calculation, the system also provides management information to improve individual CO2 offsetting, so that each participating company can sustainably improve this and contribute to achieving the climate goals.
The current climate situation is both a challenge and an opportunity, as agriculture can also tie CO2 to the right concepts for climate protection and even derive economic benefits from it.
This is what our farmers say.
Genuine opinions about the Milkmaster Programme.
GMO-free milk production based on the VLOG standard
DMK’s ‘GMO-free’ programme helps to meet the growing demand of retailers and consumers for products made without genetic engineering.
Participants produce milk based on the specifications of Verband Lebensmittel ohne Gentechnik e.V. (VLOG)’s ‘Ohne Gentechnik’ (‘Without genetic engineering’) production and testing standard. DMK supports you in completing the required documents and forms and in complying with the required standards. The most important tasks in GMO-free milk production include:
- paying attention to the ‘Without genetic engineering’ requirement when ordering feed
- when feed is delivered, checking and documenting the delivery notes
- if necessary, keeping retention samples for the feed deliveries
- preventing the spread of genetic engineering during feed transport, storage and feeding
- observing the minimum feeding period for animal purchases
- conducting regular external audits
All DMK farmers can join the programme on two dates each year. Participants’ expenses are covered by a lump sum through additional remuneration per kg of milk.