Organic dairy faces uncertain future as food prices soar

Organic dairy in the UK is facing a crisis of confidence, stated a recent report, amid fears that consumers are not so interested in paying more for organic during these inflationary times as food prices continue to soar.

As compared to on-farm costs that continue to spiral with organic feed prices reportedly tripling year on year due to higher shipping costs, the segment has recorded little growth in sales in the UK over the past five years, The Guardian reported. The organic milk farmers are seeing a further lower demand as food prices soar. 

Overall, organic dairy sales are smaller (1 percent of cheese and 5 percent of milk) compared with European countries such as France or Germany. 

Additionally, retailers say organic milk and dairy is struggling to stand out to consumers, on shelves crammed with a host of new standards and commitment, such as claims of “free-range” cows. There is also stiff competition from alternative milks, with sales of oat, almond and soy milk rising fast.

Some UK organic farmers are being paid a milk price that is lower than the price some of their non-organic competitors get, said the report, adding that some producers are now switching over to claim a higher milk price as a conventional farmer.

David Williams, the chief executive of the Organic Milk Suppliers Co-operative, said: “Organic needs to be 10p per litre more [than milk produced by cows in conventional farming systems], but the challenge is convincing our customers’ customers to pick it off the shelf.”

Williams, whose cooperative represents almost two-thirds of milk produced by organic farmers in the UK, said the standards, including not using artificial fertiliser or antibiotics, were certified, with farms being audited annually to ensure they comply.

However, Williams said organic products and brands needed to do better at selling their credentials. 

“Organic looks too much like conventional [on the shelf in its current packaging]. We should not be surprised that consumers are not so interested in paying more for it.”