Dairy cooperatives FrieslandCampina and Hochwald are teaming up to launch a member milk exchange.

The joint venture is expected to develop a more sustainable milk collection system that reduces the distance between dairy farms and processing facilities.

From November, FrieslandCampina will begin moving milk from some of its member dairy farmers in Germany to Hochwald’s German production sites.

Hochwald will also transfer the same volume of milk from its member dairy farms located near the Dutch border to FrieslandCampina’s production facility in the southern Netherlands region of Veghel.

The “multi-year” joint venture is expected to be a long-term commitment, FrieslandCampina told Just Food.

Commenting on the news in a statement, Edwin van Doorne, director of strategy for global supply chain at FrieslandCampina said: “By exchanging member milk with Hochwald in Germany, we can transport our milk more efficiently. In doing so, FrieslandCampina and Hochwald show that sustainability and cost savings can go hand in hand.”

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By GlobalData

As the exchange will shorten the distance between member dairy farms and production facilities, FrieslandCampina has said it should help to reduce costs for both companies.

The Dutch dairy co-op announced initial plans to cut costs earlier this month in a bid to save €400-500m ($423-528m) a year from 2026. In the first half of 2023 the firm saw its net profit drop year-on-year by 94%, from €139 to €8m.

FrieslandCampina and Hochwald are also expected to significantly reduce their CO2 emissions through the joint venture by more than 1,000 tonnes a year.

The exchange should not impact the work of member dairy farmers, as the milk will be paid for and collected by their respective dairy cooperatives.

Detlef Latka, CEO of Hochwald Foods added: “Cooperation between two cooperatives based on equality creates added value for members – both those of FrieslandCampina and those of Hochwald. For me, this is a good example of how cooperatives can work on joint synergy potential while also competing with each other.”