An Analysis of Success Factors for German Farmstead Dairies

Abstract

Farmstead dairies are a small but growing segment in the German dairy market, but there is little information about them. They produce and process milk from their own farm or additionally from a small number of farms from the surrounding area and market it under their own brands. Thus, farmstead dairies offer an alternative for milk producers who wish to generate added value for their milk. Although developing a farmstead dairy with marketing takes time and money and involves some risk, it offers dairy farms an opportunity to be less dependent on outside dairies, to stabilise or increase their income, and to spread their risk. Yet, only limited knowledge is available regarding success factors and their effect on the success of farmstead dairies. The present study addresses this research gap by conducting an online survey of farmstead dairies in Germany to analyse the influence of various internal and external factors on the success of this type of dairy. The results revealed that organic production, a larger processing volume and a product portfolio comprising both Yellow Line and White Line products have a positive effect on success. Furthermore, good cooperation between farmstead dairies and their veterinarians located in a region with a relatively prosperous population and a high population density contributes to the success of farmstead dairies. In addition, the results showed that increased demand during the COVID-19 pandemic has had a positive impact on their success. The results show that there are several starting points for farmstead dairy managers to positively influence the success of their businesses. At the same time, however, there are also a number of factors over which they have no influence.