Organic dairy may be a nice niche for farmers struggling with falling prices

Andre Pfimlin

By sheer number of farmers involved, dairy has always been one of the minor players in the organic sector.

However as the conventional milk crisis deepens, this may not prove to be the case forever.

All over Europe, farmers are protesting about the price of milk. While farmers protesting over price may not be new, the conventional price really has plummeted since the end of quota on April 1.

After initial April enthusiasm, much blame is being laid at the bad planning and ideological focus of the European powers that be – including the COPA farmers group. Their focus has been on promoting and supporting bigger producers, on the virtue of the market, and powdered milk value adding.

In Ireland, it can be hard sometimes to hear the voice of small to medium sized producers – in any agri-food sector – as the interests of bigger producers takes precedence.

But small to medium producers have reason to be worried. They don’t necessarily have the capital or borrowing capacity to see through the price dive.

French dairy expert André Pfimlin sees New Zealand as in an unassailable position vis-a-vis powdered milk, especially in the Chinese market.

He adds: “The Irish grassland systems, with comparable production costs to the NZ model are better placed to withstand what Phil Hogan calls a ‘reasonable’ price. But since this milk is primarily converted into powder, this pulls the European milk price nearer to the world price and thus contributes to force out milk producers in less favoured milk regions of Europe.”

Powdered milk then, is a double edged sword, at EU level and for Irish exporters trying to access new but already saturated markets.

What then of organic milk in Ireland? For the first time in years, there are a number of producers going into the organic system.

Emma Walls of organic milk processors Glenisk points out: “Our current contracts are at €0.60pl for winter milk and that’s agreed going forward for the next two years. Summer milk prices did however, soften somewhat by a couple of cents.”

The Little Milk Company - a collection of Irish organic dairy farmers - and individual cheese producers such as Beal, Mossfield and St Tolas - make up the bulk of the rest of the current organic dairy sector in Ireland.

All of these are value adding to something that really sees a grass-fed, organic brand positive, compared to powdered milk – cheese.

In 2013, a Department of Agriculture Organic Action Plan 2013-2015 was launched (a new one must be due out soon). This document said little of note about organic dairy, except that the end of quota will be a worry for the organic dairy sector. To quote the document itself: “Key Issue: profitability in a non-quota environment. Organic system has lower stocking rates, leading to lower output per acre.”

It is certainly the case that yield is lower – organic cows yield half what their most productive conventional counterparts yield in fact. Organic dairy farmers get about 5,000 litres from their cows.

Some fields are not used for cows when in rotation, while feed is also often grown on farm to alleviate high organic feed costs.

But with price, climate change and potential international trade agreement pressure for the Irish beef sector, some of these farmers may not just look at organic beef but also possibly now organic dairy too.

And with winter milk prices almost twice those of conventional, with both individual cheese makers and the Little Milk Company lapping up national and international awards, as well as lucrative export markets, the next organic action plan may have to make a little more space for dairy.


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