Omsco eyeing US organic dairy market post-Brexit

The Organic Milk Suppliers Cooperative (Omsco) is targeting a bigger share of the international market for dairy products, post-Brexit.

Omsco chairman Nicholas Saphir told the annual members’ conference he wanted more than 40% of the organisation’s future sales to come from exports and added-value dairy produce.

Mr Saphir reported that the UK market was in balance and member returns had seen an average increase of 1.65p/litre for the year ending 31 March 2018.

See also: How can dairy exports benefit UK producers?

The organisation is cagey about divulging what it pays its members, but in October 2017 it announced its average winter milk price would be 41.7p/litre, coupled with a 0.25p/litre bonus related to cell counts.

A US-aligned producer group within its membership received an additional 5p/litre premium on top of that average figure.

About 25% of the milk produced by Omsco is approved by the US Department of Agriculture for export.

Even though the US organic milk market is in oversupply, Mr Saphir said he was confident the US would be an increasing part of the long-term business strategy.

“We also believe there are growing opportunities for Omsco’s award-winning, USDA-certified cheese brand, Organic Kingdom, and organic butter in the USA,” he said.

However, he acknowledged that there would be risks to the strategy if the government were unable to secure continuing recognition of UK standards and a mutually acceptable trade agreement.

The European market also hinged on Brexit negotiations, Mr Saphir told members.

“Dairy farming exports to Europe and the continuing use of toll [contract] processing, will solely depend on whether there is a hard, soft, or transitional Brexit,” he said.

Mr Saphir added that achieving recognition of UK standards in Europe by 30 March 2019 was a big challenge.

The UK’s regional trade envoy to the US (and former Department of International Trade minister) Mark Garnier also addressed OMSCo members, warning them to think more globally.

“There is strong demand for high-quality agricultural produce from UK farms, but we need to change our culture to one that seeks out global opportunities,” he said.

“With UK exports currently equating to about 27% of GDP – much lower than comparable economies such as Germany – we need to improve our export performance,” he added.

What is Omsco?

  • The Organic Milk Suppliers Cooperative
  • Formed in 1994
  • 270 members make it the largest UK organic dairy co-operative
  • The second-largest dedicated organic milk pool in the world
  • The longest-established organic UK dairy co-operative
  • Annual turnover is approximately £100m
  • The first EU dairy company under the EU-US Equivalency Agreement to sell USDA-certified organic dairy products
  • In 2013 OMSCo partnered with US organic giant Organic Valley, the world’s largest dedicated organic milk pool