FIRST EVER ORGANIC MILK MARKET REPORT URGES SUPPLY CHAIN TO WORK TOGETHER FOR LONG TERM STABILITY

30 January 2006

The Organic Milk Suppliers Cooperative (OMSCo) has today launched its ‘Organic Milk Market Report’, the first of its kind to offer in-depth analysis of the organic milk market. It is being launched at a key turning point for the organic dairy industry, with the market returning to being under-supplied for the first time in 5 years, following a phenomenal increase in consumer demand over the last year (forecast to achieve 65% growth in the year to March 06). OMSCo hopes the report will initiate discussion on how the entire industry can work together to ensure a balanced and sustainable future market for British organic dairy products.

Richard Hampton, OMSCo’s Director of Sales and Marketing, comments, “It is in everybody’s interest that we avoid another boom/bust situation and managing the volatility of supply versus demand is undoubtedly the key challenge in the coming years. Failure to manage supply increases in line with what the market can absorb will result in over-supply, and in a market where demand will continue to track upwards, over-supply will inevitably lead to a period of under-supply. Getting it right will allow the sector to prosper. Get it wrong, and this cycle of feast and famine will reduce margins to retailers, processors and farmers. For this reason the Organic Milk Market Report is essential reading for all in the supply chain.”

In the short term, increased supply can only come from expansion by existing producers and by better utilisation of the seasonal supply profile. The report analyses the impact of these short term measures. It also examines longer term solutions including multi-year contracts, balancing imports and the limited opportunity for new farm conversions. The report highlights the major risks to future supply growth, such as fragmentation of the supply base, and the potential to over-contract imported milk and displace increased UK production.

OMSCo is the largest and longest established organic dairy cooperative and as such is in the ideal position to develop this report. Given the organisation’s exclusive focus on organic milk, it has taken responsibility for marketing the product to the consumer and ensuring that the supply chain, from producer to retailer, is provided with up to date transparent information on market trends.

The ‘Organic Milk Market Report’ is an extension of this programme and provides a complete reference to the industry over the last 10 years, as well as examining how to meet the challenges ahead. It also profiles the organic milk consumer and looks at how OMSCo’s generic organic milk marketing campaign has successfully driven demand. The 2006 report focuses on liquid milk as this has been the dominant force driving growth and demand for raw milk over the past year.

To request a copy of the report email Abby Edwards at Grayling PR on abby.edwards@uk.grayling.com
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Editor’s notes:
• For more information, images or to set up an interview contact Abby Edwards, Liz Oulton or Kate Woods at Grayling PR on 0117 922 7799