Dutch meat and dairy prices to keep rising as livestock reductions continue

Dairy products such as cheese, milk, and butter, as well as meat in Dutch supermarkets, are expected to become more expensive in the coming years as the national livestock herd shrinks, ABN AMRO said Thursday.

The bank’s sector report points to government measures and buyout schemes leading to the closure of hundreds of farms, disrupting the dairy and meat supply. “The supply of meat and milk from Dutch soil is falling, which has a price-driving effect,” the bank stated.

ABN AMRO economists forecast that the meat sector will face a decline in supply of 15 to 18 percent in the coming years. The number of dairy cows is expected to fall by 8 percent by 2030, directly linked to farmers ending operations under government exit schemes.

The bank warned that the structural decline in milk supply will leave the dairy industry with overcapacity. As a result, three to four dairy factories are expected to close by 2030.

Slaughterhouses are also projected to face overcapacity, with ABN AMRO concluding that “rationalization of slaughter capacity seems inevitable.”

One possible solution, according to the bank, is increasing imports of meat from abroad. But ABN AMRO cautioned that such a shift could bring downsides, including less oversight of product quality or changes in the types of meat.

Another option identified in the report is the development of so-called hybrid products, combining both animal and plant-based ingredients. “Lidl and Albert Heijn have introduced minced meat consisting of about 60 percent meat and 40 percent plant-based ingredients. Recently, hybrid milk has entered the market, in which cow’s milk is supplemented with plant-based milk,” the bank noted.

ABN AMRO said highly educated and younger consumers appear most receptive to these hybrid products, which the bank described as an “interesting solution."