Price fluctuations due to shifts in demand and supply occur in all markets, dairy included. Such fluctuations are inevitable. The demand for and supply of dairy products are major factors in how the price of milk is determined.
Demand for dairy products is largely influenced by economic, geopolitical, and sociodemographic developments. In production – in the supply of dairy products – technological developments in dairy farming, farmer skill levels, weather conditions, and increasingly sustainability criteria play a role. The EU’s agricultural policies have limited direct influence on the prices of dairy products, but its policies do influence several factors in production, just as national and more recently regional policies do.
The Dutch dairy sector is responding to these new challenges by, for one, improving its national and international market position. It is doing this by producing and selling unique dairy products that are safe, healthy, delicious, and affordable, and which fulfill the needs of consumers, customers, governments, and social organizations. The dairy sector is also helping to realize climate goals, increase biodiversity, preserve the picturesque landscape of cows out at pasture, promote local waste cycles, and further improve animal health and welfare. Finally, the dairy sector is helping to develop and make new earnings models for sustainability and social services possible.