1 liter is equal to 1 kg

Conversion factor causes discussions

As is well known, the Federal Council has recommended to the Federal Government to change the conversion factor from volume to weight when calculating milk money from 1.02 to 1.03. Accordingly, a draft to amend the Milk Quality Ordinance actually also provides for the conversion factor to be changed from 1.02 to 1.03. Originally, the new Milk Quality Ordinance was supposed to come into force on January 1, 2018 at the latest, but like many other things, it “got stuck” due to the current political inability to act.

Some Bavarian dairies have rushed ahead
Some Bavarian dairies have now anticipated this adjustment on the basis of private law and have been calculating with the new conversion factor since January 2018, albeit with a simultaneous correction of the respective basic price.

Price comparison is made more difficult
In most cases, these dairies have announced that the price correction will then take place with the end-of-year settlement. This makes it more difficult to compare milk prices with these companies in the current year. Due to the price equalization, the actual time of the conversion of the conversion factor is insignificant. The suppliers of such dairies have neither advantages nor disadvantages compared to those whose dairies are waiting for the announced legal change.

A quick look back
In the 1980s, Germany had determined the conversion factor of 1.02 through extensive weighing tests to be practical at the time and reported it to the Commission when the quota was introduced. A change in the factor before the end of the quota system in 2015 would have resulted in a recalculation of the national quotas. While the conversion factor was appropriate at the beginning of the 1980s due to the then customary collection of milk using a suction tube from relatively small quantities and the associated air impact, a conversion factor of 1.03 is appropriate today, close to the value of the density of the milk. The majority of the EU countries now use the factor 1.03.

Total payout remains the same
This conversion factor is only to be used in the delivery relationship between the milk producer and the dairy. When selling a dairy to a retailer, the conversion factor is of no importance. Its change does not affect the revenue situation and therefore also does not affect the real disbursement of the dairy.

Usually no effects on the milk producers
Theoretically, the changeover could only be relevant to milk money for producers whose dairy has a graduated price system and who, without actually milking an extra liter, get into the higher scale and thus get a higher quantity surcharge.