The UK’s largest organic dairy co-operative, OMSCo, has raised its milk price by 1p/litre with effect from 1 October.
The increase means the co-op’s 270 owner-members will receive an average of 41.7p/litre for milk this winter, coupled with a 0.25p/litre bonus related to cell counts.
Many OMSCo suppliers are also members of premium pools, such as the United States Department of Agriculture-aligned group, receiving up to 5p/litre on top of their average price.
“The increase reflects a solid performance in all markets,” said OMSCo chairman Nicholas Saphir.
The increase was delivered despite turbulent political and global dairy market conditions. For the year ending 31 March 2017, the co-op also increased its reserves to £2m, following a 13th payment to members, added Mr Saphir.
“Having a motivated and fairly rewarded membership will be critical to our future success,” he said. “Increasing our milk supplies is a priority as we continue to decouple organic milk from the conventional milk price by developing added-value markets outside the UK and Europe.”
At its annual general meeting on 2 October, OMSCo also announced an alliance with Dutch organic dairy co-operative Eko Holland.
The co-op said the agreement was critical for future export success and would give OMSCo access to a high-quality milk supply in Europe, increasing the combined milk production from the two processors to 400m litres a year in Europe.
“It will broaden our portfolio of products and increase our scale of operations,” said Mr Saphir.
“This will improve our ability to balance efficiency, enhance our flexibility to meet customer needs and provide more milk and processing in Europe.”
OMSCo announced a similar deal with the world’s largest dedicated milk pool, Organic Valley, in 2015. It says that deal has opened new markets in the USA and led to the sharing of expertise across the Atlantic.
The deal: post-Brexit opportunities
Richard Hampton, managing director, OMSCo:
“This deal is a carbon copy of our existing arrangement with Organic Valley.
“It gives us access to substantial milk volumes and processing capacity inside the EU.
“This will help OMSCo deal with uncertainty around Brexit and give us access to supplies that would not be subject to tariffs after we leave the EU.
“Currently, the business would not be affected, as the majority of exports head to countries not in the EU. However, this gives us the option to do something outside the UK and to further protect our producers and our business.”