Organic milk price under threat
By Robert Harris
ORGANIC dairy producers face lower prices if they produce excess milk because rapid growth in production is outstripping market demand.
Sally Bagenal, chief executive of the Organic Milk Suppliers Co-operative (OMSCo), said milk destined for organic outlets will still be worth a 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. But we have devised a method with our farmers to overcome this.”
Producers will receive the higher price for the amount of litres stated in their OMSCo production forecast and for extra litres needed to cover any shortfall.
But farmers supplying more will receive a lower price for the extra litres. It is unclear what the figure will be, as negotiations are still under way.
But Mrs Bagenal believes it will be a short-term measure only, even though 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,” she said.
“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.”
And, while the number of dairy farmers has mushroomed recently, the rush to convert seems to be abating, said Mrs Bagenal.
“The organic conversion scheme is usually taken up in 10 minutes. This time round, there has not been as much interest.”