Dutch-Belgian Dairy Cooperative Faces Mounting Financial Challenges
Today 8:00 am – Klaas van der Horst
The Milk Trading Company (MTC),a cooperative serving dairy farmers in Belgium and the Netherlands,is navigating a period of significant financial strain,according to its recently published annual report. The cooperative experienced losses in 2024, dwindling reserves, and a concerning decline in the volume of milk covered by its programs, while simultaneously facing a legal claim from former members.
The report highlights that the decreasing number of participating farms necessitates a essential shift in the MTC’s operational model. The board of directors has initiated an exploration of revised working methods to be implemented by the end of 2024, signaling a potential “MTC 2.0” restructuring, though specific details remain unclear.
Adding to the financial pressure, the cooperative’s auditor flagged a potential loss in an ongoing appeal brought by a group of former members. A negative outcome could require the MTC to pay over €227,000. The cooperative’s limited assets and declining income – driven by membership losses and reduced demand for milk price fluctuation coverage due to currently favorable market conditions – raise questions about its ability to meet this obligation.
Future losses Anticipated
The situation is projected to worsen in 2025. Milk prices were fixed at approximately 45 cents per liter, considerably below current market rates. This discrepancy will likely result in further losses for both individual members and the cooperative as a whole, as members will be required to contribute funds to cover the price difference rather than receiving a payout. This will further exacerbate the MTC’s already precarious financial position.
Legal expenses also contribute to the financial burden. While two legal proceedings against members and a former director have been resolved, an appeal remains outstanding.
the role of Dirck Coucke,a key figure in the MTC’s history,is also under scrutiny. He has formally retired and is no longer mentioned in the annual report, however, Belgian media reports suggest he remains involved in the cooperative’s affairs.
© DCA Market Intelligence. This market information rests copyright. It is not permitted to multiply, distribute, distribute or make the content available to third parties, in whatever form, without the express, written, permission of DCA Market Intelligence.
About the Author:
Klaas van der Horst is a dedicated observer of the dairy market, providing news and analysis of key developments.
