ORGANIC MILK MARKET REPORT 2007 - TRADE PRESS RELEASE
This press release was posted on : 16th March 2007
ANNUAL REPORT SHOWS HEALTHY GROWTH FOR ORGANIC MILK
The Organic Milk Suppliers Cooperative (OMSCo) has today launched its 2007 ‘Organic Milk Market Report’; the most comprehensive and in-depth analysis of the organic milk market available. It shows conclusively that sales of organic milk remain strong, with expected growth of 20% for the year to March 2007, continuing to outstrip supply.
Richard Hampton, OMSCo’s Sales and Marketing Director, comments, “Following a phenomenal increase in year-on-year sales of 65% in 2005/06, the liquid milk market has returned to its underlying growth of 20-25%. This, combined with increased demand from the yogurt and cheese sectors, has contributed to a solid performance for organic dairy over the last 12 months. In the year ahead market growth will continue to be supply constrained. This will have a particular impact on new market sectors who will find it difficult to secure their organic milk requirements.”
The 2007 Market Report highlights that balancing supply and demand remains the key challenge to the industry. Overall volumes have increased significantly in the last year and this momentum must be maintained.
Hampton explains, “The return of ‘in-conversion’1 farmers, improved supply chain efficiency and flattening of the production profile2 have all played a part in growing the supply base over the last 12 months. Most importantly, price increases over the last year have resulted in improved farmer confidence and have allowed on-farm expansion, leading directly to an increase in UK supplies. The result has been a growing market largely supplied by UK production, although limited gaps in supply have had to be filled by strategically managed imports.”
The price increases have also created the climate for new conversions and 85 million litres of new organic milk will become available during 2008. This is adequate to meet the growth needs of current sectors.
Hampton comments, “We must now make sure farm returns are not eroded if we are to sustain an appropriate flow of new converters to meet future demand needs.”
The Market Report also highlights other elements necessary to increase farmer confidence and allow conversions to take place. In particular, it states that long term contracts and the need to maintain density of collection are of critical importance.
Hampton adds, “Converting to organic dairy farming is a risky decision. Long term contractual commitments reduce this risk. The producer gets security of market and the purchaser gets security of supply, so the case for these contracts has never been stronger. It is also of the utmost importance that we avoid unnecessary fragmentation of supply. This adds additional cost and greatly reduces flexibility in a market which is heavily reliant on balancing and where density of collection is relatively low.”
OMSCo is the largest and longest established organic dairy cooperative, representing the majority of the UK organic milk pool and as such is in the ideal position to develop this report. Given the organisation’s exclusive focus on organic milk, it has taken responsibility for the generic marketing of the product on behalf of the whole industry. It has also ensured that the supply chain, from producer to retailer, is provided with up to date transparent information on market trends. To receive a copy of the report log on to www.organicmilk.co.uk or call Emily Enright on 0117 922 7799.
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Editor’s notes:
To obtain a copy of the report, or for more information, images or to set up an interview contact Emily Enright or Abby Richardson at Grayling PR on 0117 922 7799
OMSCo was formed in 1994 when five like-minded
organic dairy farmers joined forces to sell their organic milk. Now with around 500 members, OMSCo is the largest and longest established UK organic milk supplier.