Profits of dairy traders vary widely

On the dairy market, the pace is perhaps most determined by the trading houses. They do not necessarily produce large volumes themselves, but they do handle a lot of product. Prominent Dutch companies like Hoogwegt and Interfood are also leaders on a global scale, but they cannot rest on their laurels. Challengers and newcomers like Numidia and Cefetra Dairy are proving to be fast growers. And other established names are also pursuing turnover in a market that is shrinking in Europe.

Based on public Chamber of Commerce data, we assess the financial balance from large to smaller companies. The common denominator is that turnover was under pressure in 2023, after a year with extremely high prices the year before. Furthermore, it appears that net profit margins vary widely.

1. Hoogwegt remains the largest
For the Hoogwegt Group, the largest dairy trader in the Netherlands in terms of turnover, the past fiscal year that ended last September was not a high flyer. Turnover decreased significantly, but profit decreased even more. Hoogwegt saw turnover drop by about 10% to €3.46 billion last year. The bottom line resulted in a meager €15 million profit. This is a decrease of a whopping 63% compared to the previous fiscal year. Hoogwegt does not disclose volumes. It is interesting to note that Hoogwegt is diversifying its activities, including with subsidiary Meelunie. Additionally, Hoogwegt recently invested in a Canadian start-up of cultured milk. This is dairy, but no cows are involved.

2. Interfood proud of its own performance
Dairy trader Interfood achieved an excellent result in its fiftieth year of existence. Although the 2023 financial statements show an almost 17% lower turnover, net profit more than doubled. According to the annual report, which this time is fully available on the company's website, turnover decreased from €3.6 billion to €3 billion, maintaining the company as the second largest dairy trader in the Netherlands in terms of size. However, the company clearly took first place in terms of profit, with a net profit of €71.5 million. To achieve these results, Interfood had to transport 1,156 million tons of product from A to B. This is slightly less than the 1,172 million tons from the previous year.

3. Numidia on track to reach a billion in turnover
Numidia is the challenger to Hoogwegt and Interfood. "Within five years, aiming for the number 2 position among dairy traders," said CEO Han van Hagen a year ago. Holding onto the growth is going well. Despite lower prices, dairy trader Numidia from Herten, Limburg, managed to almost maintain turnover in 2023. A 16% volume increase to a record of 351,000 tons of physical product offset the lower prices. However, Interfood and Hoogwegt still seem far out of reach. Net profit took a step back to €16 million. This is a 23% decrease compared to the record year of 2022.

4. Farmel finds its way back up
Farmel had turbulent years, but is gradually returning to calmer waters. Particularly the dairy trading arm of Farmel is showing clearly positive results again. The holding's turnover for 2023 amounted to €553 million. This is significantly less than the €727 million booked in 2022, but most of this decrease is due to lower dairy prices. The operating result increased significantly, turning from a loss of €5.5 million to a slight positive of over €1.1 million. The consolidated net result ended at a negative €1.9 million. The dairy trading division is profitable, recording a profit of €3.8 million. There is still work to be done at subsidiary Veco.

5. Geris doubled its profit in 2023
Dairy trading company Geris can look back on a successful 2023. Although turnover decreased slightly to €369 million, profit increased by a remarkable 129% to €7.1 million. Relative to turnover, this results in a net profit margin of 1.92%, which Geris, as a trading company, can be proud of. However, the cash flow deteriorated somewhat last year. Additionally, with a solvency of less than 25%, the company's financial position is not very solid, even though the company is only 15 years old.

6. Fresena achieves stable results
Fresena saw a 15% decrease in turnover in 2023 to €285 million. This did not have much impact on profit, as it slightly increased to €5 million. This results in a net profit margin of 1.75%. The company primarily focuses on the European market, from which the majority of its turnover comes. An area of concern is the solvency of 17%, which is not particularly strong.

7. Newcomer Cefetra proves to be a fast grower
Cefetra Dairy has only been around for a few years, but has already achieved a substantial turnover. In 2023, this was €216 million. This is an increase of €100 million compared to a year and a half earlier. With a profit of €35,000, the company is already in the black, albeit very modestly. According to the company's annual report, this is due to high start-up costs. Cefetra Dairy expresses the ambition to continue growing. An exciting development for them is that the German parent company Baywa has encountered financial difficulties, although the company seems to be able to avert a downfall.

Wouter Baan

Wouter Baan is the editor-in-chief of Farmerbusiness and a market specialist in dairy, pork, and meat at DCA Market Intelligence. He also tracks developments within the agribusiness sector and conducts interviews with CEOs and policymakers.

w.baan@farmerbusiness.com