By FWi staff

ORGANIC dairy producers face lower prices if they produce excess milk because rapid growth in organic milk production is outstripping market demand.

Sally Bagenal, chief executive of the Organic Milk Suppliers Co-operative, says milk destined for organic outlets will still be worth the guaranteed 29.5ppl.

But the extra being sold into non-organic markets will be sold for less.

“Any growing market is going to experience short-term oversupply,” says Mrs Bagenal. “But we have devised a method with our farmers to overcome this.”

All producers will be paid the full amount for the number of litres stated in their OMSCo forecasts, and for extra litres that may be needed to cover a shortfall across the supplier base.

But any farmer supplying more will receive a lower price for the extra litres. It is unclear what the figure will be, as negotiations to sell this extra milk are still under way.

But Mrs Bagenal believes it will be a short-term measure, even thought the UK is on target to be 100% self-sufficient in organic milk this year.

“The organic market is tiny, but is growing very fast. We are working very closely with processors and retailers to ensure it continues to grow, and we would hope to return to 29.5ppl for all milk quickly.”

And while the number of organic dairy farmers has mushroomed, the rush to convert seems to be abating, says Mrs Bagenal.

“The organic conversion scheme is usually taken up in 10 minutes. This time round, there has not been as much interest.”