The German DMK did again this year what it has been doing for years: it achieves a turnover of approximately €5.5 billion from 5.5 billion kilograms of milk. These figures are roughly stable for 2021, 2022, and 2023. The return is below 0.5%. It might suggest that not much else is changing. However, that is a misunderstanding.
There is enough happening beneath the surface. For example, what fluctuates is the payout to the members. In 2022, the cooperative enterprise in Germany paid a clearly above-average milk price, even in a year with already particularly high milk prices on average. DMK, which often struggled to keep up with the milk price, had improved itself. However, last year the company fell back again. CEO Ingo Müller apologized and promised improvement at the presentation of the annual figures. That was not an unnecessary gesture, as DMK has a long history of below-average milk prices. Moreover, since the beginning of this year, a volume of 700 million kilograms of milk has been terminated and reportedly transferred to related companies, such as DOC Germany, also a substantial volume. In recent years, many members have also left DMK in Germany.
Loss of Members
According to the latest annual report, DMK in Germany still has 3,872 own members, plus eleven affiliated supplier clubs, only a shadow of the 11,000 members at the establishment of the company in 2012. At sister organization DOC Kaas, DMK has 653 members. A year earlier, DMK reportedly had around 4,100 members in Germany and about 600 at DOC Kaas.
Mlekoma Dairy
This also indicates that the importance of DOC Kaas in DMK is increasing and the balance is shifting. Besides the Netherlands, Poland is also becoming more important for DMK. The company already had a 51% stake in the private processor Mlekoma Dairy in Central Poland. This company has two factories there, with a combined production of 42,000 tons of dairy, mainly powders. In early June, it was announced that DMK also wants to acquire the remaining 49% in Mlekoma. The amount is not known. DMK also has companies in Russia, but it has not been investing there in recent years.
Cheese Becoming More Important
Another change at DMK is the product range. Cheese, in particular, is becoming increasingly important for the company. DMK is the largest cheese producer in Germany and strong in, among other things, sliced cheese and mozzarella. Precise figures for 2023 are not yet available, but in 2022, cheese accounted for €2.2 billion in turnover out of a total of €5.5 billion. In 2021, cheese only had a share of €1.9 billion. Cheese is becoming more important, although the high cheese prices in 2022 also played a role.
Additionally, DMK generates around €1 billion in fresh and long-life dairy products. This segment has always been one of the weaker links at DMK, with low returns, but apparently indispensable in the product range. In 2022, it also generated around €140 million in ice cream, but the company actually wants to get rid of it, similar to Belgian Milcobel trying to divest its ice cream division Ysco. DMK has implemented numerous reorganizations in the ice cream division, but it has not been successful in making it profitable. Selling seems to be the best option. The problem is finding buyers. However, this is a widespread ice cream industry issue.