The Dutch dairy sector must adapt itself to maintain its position, the largest co-op FrieslandCampina is warning, the Financieele Dagblad said on Thursday.

FrieslandCampina’s 13,500 farmer-members will have to undergo painful measures during the transition to the future, the co-op said. These include putting more cattle out to pasture, additional funds for innovation and a faster resolution to the ammonia problems.

The €11bn dairy sector faces a new cap on milk production only two years after the milk quota were abandoned. As a result, milk production increased by nearly 25% to 14.4 billion litres in 2016. This adversely affected milk prices.

In addition, dairy farmers must adhere to strict new European regulations on manure management, the FD said. Some 100,000 cattle have already been slaughtered and a further 60,000 must be killed to make sure the national herd meets EU manure legislation.

FrieslandCampina is by far the largest of the 13 dairy co-ops in the country, but it estimates its membership will fall by 3,500 to 10,000 by 2020.

FrieslandCampina’s chairman Roelof Joosten said farms will get bigger and herd sizes will average 120 cows instead of the current 95. The dairy sector provides direct employment for 45,000 people and contributes an annual €4bn to the country’s trade surplus, he said.