OMSCO highlights that organic conversions levels are close to being met

The number of UK dairy farmers converting to organic production is close to the level required to meet the forecasted increase in national demand for 2008/9, according to the Organic Milk Suppliers Cooperative (OMSCo). The cooperative urges farmers who are still considering converting to organic production, and who could supply from Autumn 2008, to start the process immediately.

The huge consumer demand for organic milk in recent years has led to a shortage in the UK organic milk supply, which is requiring more farmers to convert to organic production to meet the additional demand growth. In the short term supply will remain tight due to the 2 year conversion lead time. However, for the long term OMSCo urges the need for conversion levels to be carefully managed to ensure that the market does not return to a cycle of over and under-supply when the organic milk from converting farms becomes available from 2008.

OMSCo's national market predictions show an additional 60 million litres of milk is required in 2008/9 to satisfy demand growth. Data from the certification bodies shows 56 million litres of this requirement has now been secured*. It is anticipated that a further 60 million litres will be required for the 2009/10 fiscal year, conversions for which will start in 2007.

Huw Bowles, Chief Operating Officer for OMSCo, commented: "With our unique focus on organic milk we have taken the lead in working to ensure a stable supply chain. In September we hosted the first Organic Milk Summit at the Dairy Event, bringing together representatives from retailers, processors, manufacturers and farmers. There was overwhelming agreement that up to date information on market conditions was essential to ensure a controlled approach to recruiting new organic dairy farmers. This is in everybody's interests and we have been liaising closely with the certification bodies to keep track on conversion rates on behalf of the market."

Bowles also highlighted that the recent changes in organic farm gate returns meant conversion was now an economic option for many non-organic farmers.

He continued, "The market is working. Recent increases in farm gate prices mean the current economics of organic production are sound. As a result the national conversion requirement has almost been achieved for this year, without the need for conversion payments or other artificial incentives. The market is well placed to meet demand for 2008/9, but we must guard against excessive conversions to ensure farm returns remain economic. This is the only way to guarantee the industry's ability to meet demand growth in future years."

OMSCo is the UK's leading and longest established organic dairy cooperative uniquely focused on the production and supply of organic milk. With nationwide membership, OMSCo now supplies the majority of organic milk produced in this country from milk fields offering the most cost effective collection. The result is the best blend of stability, efficiency and highest possible farm gate returns. OMSCo is dedicated to building a sustainable long term organic milk market in the UK – to the benefit of the entire supply chain, from farmer to consumer.