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Global
Organic Milk Undersupply Easing
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A large rise in
organic milk production in
North America
is easing the global supply shortage.
A flood of
organic milk is coming into the US as a large number of dairy farmers
complete their conversion period. Changes in organic farming regulations
have been responsible; the Harvey ruling requires organic milk producers
to use 100% organic feeds from June onwards. |
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Many dairy
farmers rushed to complete their conversion period before the new
standard goes into effect. A surplus of
organic milk in
North America market is leading to a flurry of new product development.
For instance, Whitewave Foods has developed the first-ever omega
acids fortified organic milk. Horizon Organic Milk Plus DHA contains
omega acids that originate from marine sources. Many new organic
yoghurts, ice-creams, and cheeses are likely to come into this
market this year as manufacturers focus on product innovations.
Whilst North American dairies find new uses for organic milk,
European dairies continue to struggle to find adequate supply. A
number of European countries are experiencing organic milk
shortages. The UK and German markets have been the most adversely
affected with processors importing significant volume from
neighbouring countries. The launch of organic
dairy products by German
discounters has been a factor behind demand surging since 2005.
Undersupply in the
UK
market is leading one leading British retailer to market
‘transitional organic milk’, which is collected from dairy herds
that have yet to complete their organic conversion period. Whole
Foods Market, which will open its inaugural organic superstore in
June, is sourcing organic dairy products from mainland
Europe because it was unable to find suppliers in the
UK.
Organic milk supply, or rather the lack of it, is becoming a major
concern for European milk processors and retailers. Some are
extending fixed contracts to dairy farmers to encourage them to
convert, whilst others are offering to pay for inspection &
certification costs. Shortage of organic milk is stunting product
innovations with manufacturers focusing efforts on finding new
sources rather than developing products.
Supply was a reason behind the American organic yoghurt producer
Stonyfield Farm to acquire an Irish organic dairy last year. The
company is using Irish organic milk to produce its Stony organic
yoghurts, which will be launched with the strapline ‘Yoghurt on a
Mission’
in the UK next month.
Stonyfield could possibly use Australasian organic milk
for its European operations.
Some North American dairies have
been using organic milk from New Zealand to make
organic dairy products. With the American market
no longer requiring imports, New Zealand and Australian
producers could start meeting the shortfall in European
production. The two countries are already
established exporters of organic dairy products to Asia.
Imports maybe necessary in the European organic dairy market,
however in the long-term greater regional production is required
especially as consumers become more sophisticated in their
purchasing habits; domestic sourcing and food miles are becoming
just as important as the organic production method. The organic food
industry may have become global, however consumers are increasingly
thinking local.
Related Reports:
#7002-40 The
Global Market for Organic
Food & Drink
The European Market for Organic
Dairy Products
(to be launched in 2009)
Posted: May 30th 2007
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