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Introduction
Dairy Sector
The dairy sector is one of the largest and most vital sectors in agriculture in The Netherlands. The dairy sector is highly specialised, horizontally concentrated, vertically integrated and increasingly international in its operation. *1
There are over 18,000 dairy farms in The Netherlands spread out over 1.2 million hectares of grassland and corn fields (28% of the total surface area of The Netherlands). 1.47 million dairy cows produce annually nearly 12 billion kilograms of milk which is converted into various dairy products. The Netherlands imports £2.3 billion worth of dairy products but exports £5.4 billion. 35% of dairy products are sold in The Netherlands, 45% are exported to the rest of the European Union and 20% of dairy products produced in The Netherlands are exported elsewhere. *1
In 2011, the dairy market was on a positive inclination. A combination of limited availability and increased demand during the first few months had led to a rise in prices. The prices for dairy products were more or less in line with inflation, when the economy is doing well the dairy sector excels. However when the economy has taken a turn for the worst, the consumption of dairy products reflects that. *1
Figure 1
The favourable progress of prices in the market for dairy products was reflected in a positive development of the milk price paid to farmers. Figure 1 (above) shows us the increasing prices for the various dairy products sold in The Netherlands. In 2011, the average price for milk was 14% higher than what was paid the previous year as shown above. *1
Europe has a milk quota system which limits milk production per Member State. Under the EU milk quota system, dairy farmers are allowed to produce up to a certain level of milk and milk fat. The milk quota system was introduced as a way to control production rates so the supply of milk doesn’t far exceed the demand. This milk quota is calculated over the period 1 April - 31 March of the



References: 1. Unknown Author (June 2012). Dutch Dairy in Figures 2011. Zoetermeer: Dutch Dairy Board Productschap Zuivel. p3-23. 2. Unknown Author. Dairy Housing Management. Arnhem: Veepro Holland. p3-15. 3. Unknown Author. (2013). Ayrshire Cattle. Available: http://en.wikipedia.org/wiki/Ayrshire_cattle. Last accessed 27th Feb 2013. 4. Unknown Author. (2013). Holstein Cattle. Available: http://en.wikipedia.org/wiki/Holstein_cattle. Last accessed 27th Feb 2013. 5. Unknown Author. (2013). Jersey Cattle. Available: http://en.wikipedia.org/wiki/Jersey_cattle. Last accessed 27th Feb 2013.

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