More organic dairy farmers will be needed to satisfy growing demand in the sector, but only in modest numbers, says the Organic Milk Suppliers’ Co-operative.
With liquid milk now the fastest-growing sector of the organic dairy market, the co-operative estimates 75-100 new organic herds will be required in the next 24 months to satisfy an additional 60m litres’ demand.
But sales and marketing director Richard Hampton cautioned farmers against running headlong into organic conversion.
“This is a tiny proportion of the UK’s dairy farms, so the sector does not offer a magic solution to low farm returns.”
In a new report on the future of the organic milk sector published today, OMSCo says the industry has conquered recent years of oversupply which saw surplus organic milk sold into the conventional sector, hammering farmgate prices.
Estimates suggest those farmers who were unable to rein in production saw prices drop to 23p/litre, compared with the 29p/litre originally paid.
Mr Hampton said organic dairy farmers’ future rested on matching supply to demand as closely as possible.
“We must avoid another boom and bust situation. It’s not as easy for the organic sector to turn the taps on and off, or deal with excess milk, compared with conventional milk production.
“We need to initiate discussion on how to increase supply in a managed and sustainable way.”
Organic dairy farmers’ net production margins were little different from their conventional counterparts, he added.
“But the additional costs and upheaval of organic conversion are significant.”
Ed Goff, who milks 70 organic dairy cows near Whittington, Shropshire, said:
“At last, we are starting to produce organic milk at a profit again.
“The last three years have been seriously difficult.”
A welcome return to prices around the 29p/litre mark meant there was some room for drawings and re-investment.
“But we were getting these returns five years ago.
In that time our costs have risen – particularly as we are now required to use 100% organic feed.”