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Message from the Elected Officers

Thomas Stürtz and Heinz Korte

The CEO
Coronavirus year

The corona year has been very challenging for everyone. Farmers played a special role in ensuring food security. At the same time, they are confronted with a multitude of demands from politics, society and commerce. Both Thomas Stürtz and Heinz Korte experience these challenges on a daily basis in their own companies. Here they provide an overview of the past financial year and the important course set for the DMK Group.

 

 

Last year was an enormous challenge for the entire dairy industry. On the one hand, the corona pandemic has accelerated many developments and rapidly driven the general shift in consumer desires towards high-quality products, produced in harmony with animals and nature. On the other hand, this period has also shown what we as the DMK Group are capable of achieving together.

As Germany's largest dairy cooperative, the reliable supply of food to the population is our clear mission. But even though we on the farms and the staff in the factories and administration were also affected by the impact of the virus, we still fulfilled our responsibilities at the height of the crisis. We continued to supply our dairy with high-quality milk, so that the dairy could produce versatile products from it and so that the shelves in the supermarkets were always full for the consumers.

 

The past year has thus impressively underlined how "system relevant" the food sector really is. But it also showed that nutrition is not a foregone conclusion. Because: Farmers feed the population. Many consumers and politicians were hardly aware of this anymore, because almost everything is available to us in Europe around the clock, immediately and in abundance. But when international flows of goods came to a standstill, supermarket shelves were virtually emptied and purchasing quantities were partially rationed, a completely different picture emerged. We farmers produce the "means to live". And we are proud that we played our role within DMK to help people get through this time well. Our work involves a high level of commitment, dedication and costs, because even detached from corona, we are faced with a multitude of requirements that we have to fulfil and also want to fulfil. However, in order for us to continue on this path sustainably, this effort must be valued and rewarded accordingly throughout the entire supply chain. This should be clear to everyone who talks about it and demands change – whether consumers, politicians or retail buyers. The costs and the effort for the necessary changes must be shared by everyone. Often we farmers are left to bear them.

It is all the more important that we now speak with one voice as an entire industry. That is why the decision of the German dairies for a new, joint industry communication was a great success and an important strategic decision for all of us. We need to be more active in showing people who we are, what we stand for and what we achieve, because in the past, our milk made it into the fridges, but less and less into the minds of consumers – especially younger people. That's why we have to reach them with a joint communication strategy on the channels they use and present ourselves authentically as a dairy industry. The impact of the corona crisis makes this abundantly clear. But opportunities are also presented to us, thanks to the return to everyday rituals like cooking together, having dinner with the whole family and eating healthily with natural ingredients. In future, we as the dairy sector will therefore have a powerful voice in the dialogue with consumers, politicians and the media.

In addition, we addressed a central issue on our farms and in our cooperative last year. At the end of September, we introduced "Fixed Price”, our own fixed price safeguard, complementing our classic basic price model. Here we have reached a milestone in updating our supplier relationships. Our fixed price safeguard offers planning security and reduces the liquidity risk of participating farmers. The DMK Group takes care of safeguarding the fixed prices. In cooperation with established brokers and the stock market, up to 30% of the average monthly milk volume can thus be offered via DMK on the commodity futures exchange at a guaranteed price. The processes are secure and closely monitored by commercial and financial auditors.

In 2020, we proved that we are facing up to social change as the DMK Group. Even though corona came unexpectedly and suddenly for all of us, we did not simply surrender to the situation, but actively counteracted it with prudent and responsible action. The measures implemented over the past years have put us in the starting position to do this, which has now enabled us to react so flexibly.

As a milk-processing cooperative of farmers, DMK Group generates income for its farms. Even though the general price level for raw milk in 2020 was nowhere near a level that could fully cover and finance the necessary investments on the farms outlined in the report, DMK was able to escape the general downward trend in payments in the past financial year. We have thus reached our milestone of paying a payout price of 32.05 cents/kg, which is at the average level of our comparative dairies.

During the current year 2021, there are also signs of a positive market development: milk prices for dairy products are rising and the markets are expecting better conditions. Our goal is therefore clear: we want to push through rising prices. Throughout the company, we have become more efficient internally and are saving costs.

Nevertheless, we must not delude ourselves: The challenges will not diminish in 2021. Whether it is corona, global warming, changing eating habits, animal welfare and political changes – we will have to find answers to everything. As DMK, we have learned in recent years to think ahead and move forward together – with more speed and decisiveness. This is our path and we want to continue on it together.

 

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Integrated Annual Report 2020