Cost Crises Compounds Organic Milk Full

UK - Organic milk production in the EU market could become increasingly constrained during 2008, as rising feed costs are forcing some farmers to quit the market, says an industry expert.
calendar icon 23 January 2008
clock icon 1 minute read
Huw Bowles, finance and operations director for the UK-based Organic Milk Cooperative (OMSCo), told that rising commodity costs were resulting in reduced production of liquid organic milk as farmers opt out of the segment.

"The increased feed costs are leading some organic farmers and even those considering converting to organic milk production to question the economic sense of such a transfer," he said.

Increased import calls

The comments follow on from claims by the UK's Milk Development Council (MDC) that imported organic milk supply from other European producers would need to be stepped up to bolster supply amidst growing demand for organic dairy goods.

The MDC claims that new requirements for organic feed that now prohibit the use of any non-organic products are expected to further compound feed prices, which could potentially reach £400 per tonne during this year. Such a figure is double the price paid two years ago, which may require either increased cost for both manufacturers and consumers or higher export output, according to the MDC.

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