The Arla dairy co-op says it wants up to one billion kg/litres of extra milk over the next year from cows getting feed free from genetic modification, and expects to be able to pay an extra 1c per kg of milk produced.
According to Arla, retailers in Germany are increasingly demanding dairy products from cows getting GM-free feed, and are willing to pay a price premium.
The company says this trend is likely to spread to other markets, and Arla wants to capture this opportunity immediately to add value to its farmers’ milk.
According to chairman, Ake Hantoft, Arla is well-prepared to meet the growing demand from trans-European retailers for GM-free feed.
“We have the biggest organic milk pool in the world, for which the feed is by default GM-free. Our Swedish farmers have always used GM-free feed. This means that around 20% of Arla’s milk pool already meets this market demand.
“There is commercial potential in this that we can capture and build on immediately by attracting more farmers who are willing to convert to GM-free feed,” says Hantoft.
He emphasised the decision is based on the commercial opportunity, and does not indicate that Arla’s owners are taking a new stance on GM.
“We welcome innovative solutions and new technology, which can improve farming and help feed the world’s growing population in a sustainable manner. We are not closing the door on GM, and we will continue to monitor the scientific research into the pros and cons of GM,” he said.
“Converting to GM-free feed will be a cost for the farmers. However, from the price premium that retailers and the consumers will be willing to pay, Arla will compensate the farmers as they convert. This model, driven by market demand, is also used for organic milk, for which the farmers are already compensated for the extra feed cost.
“The market-driven compensation will also be paid to all our Swedish farmers, who already use GM-free feed. We do not know exactly from when, but we are working fast to unfold the details,” said CEO Peder Tuborgh.
The practical challenges for the company and on-farm are still to be investigated.
“Currently, the demand is coming from Germany, where we will immediately look into the practical issues such as logistics and separated processing. As the commercial opportunities arise in other markets, we will invite farmers to participate and gradually take on more farmers. But we still need to explore exactly how we can make this happen and how fast,” said Tuborgh.
The genetically modified feeds currently used are in most cases limited to soy, which on Arla farms is between 0% and 10% of the total feed volume.
Arla says that milk from these farms is, per definition, GM-free as the GM cannot be traced to the milk.
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