Dutch Dairy and Meat Sectors Face Supply Challenges

Dairy products like cheese, milk, and butter, alongside meat, are set to become more expensive in Dutch supermarkets as the national livestock herd is reduced, according to a recent report by ABN AMRO. Government measures and buyout schemes are leading to the closure of numerous farms, disrupting the overall supply of dairy and meat in the country. ABN AMRO forecasts a 15 to 18 percent decline in meat supply and an 8 percent reduction in dairy cows by 2030, influencing the market dynamics and increasing prices. The bank warns that this structural decline will leave the dairy industry with overcapacity, predicting that three to four dairy factories might close by 2030.

Similarly, slaughterhouses could face overcapacity issues, implying a need for rationalizing slaughter capacity. One approach to counteract these challenges could involve increasing meat imports, although ABN AMRO highlights potential downsides such as decreased oversight of product quality. Another solution could be developing hybrid products that combine animal and plant-based ingredients. Retailers like Lidl and Albert Heijn have already begun offering minced meat blends that are 60% meat and 40% plant-based, and hybrid milk products are now available in the market. The bank notes that these hybrid products are particularly popular among highly educated and younger consumers, labeling them as an "interesting solution" to the ongoing challenges in the dairy and meat sectors.