Increasing demand for organic milk is welcome lift for suppliers

Dairy Farmers of Britain has increased the price it pays organic suppliers by 3.6p/litre on the back of surging demand for organic milk and dairy products.

Recent retailer price increases had allowed the co-operative to pass some of the extra value back to its organic suppliers, and it was recruiting new organic members, it said.

A spokesman for Dairy Farmers of Britain told Farmers Weekly the move came on the back of an earlier 3p/litre rise late last year.

“Based on an average supply of 600,000 litres at 4.16% butterfat and 3.3% protein, this gives a farmer return of just over 28p/litre.”

Renewed demand meant the co-op was processing 50% more organic milk through its own plant at Whitby, North Yorks, and its Lubborn Creamery had seen demand for organic Somerset Brie grow by 15%.

Other organic milk buyers were quick to champion the prices they paid farmer suppliers.

Huw Bowles of the organic suppliers’ co-operative OMSCo said the 2006-07 price paid to farmers had risen about 3p/litre on the current year.

Producers were receiving an average milk price of between 27-28p/litre, he said.

“But OMSCo has a seasonality payment structure in place which accounts for about 8p/litre between spring and winter milk production.

This reflects the difficulties of producing organic milk in the winter and the extra costs producers face.”

In spring and summer months, excess organic milk was still finding its way into conventional markets, Mr Bowles said.

“But we hope incentivised pricing structures will even out the organic milk production profile, and encourage new entrants the organic sector needs to meet demand.”

A spokesman for Milk Link said prices paid to its organic suppliers depended on milk quality and volume payments, but the organic premium over a standard litre had risen by 2p/litre in January to about 8.25ppl.

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