Dairy farmers are turning their backs on Britain's organic milk market as economic pessimism dents consumers' previously buoyant demand for organic produce. The organic goods market at large is being "credit crunched", particularly among new products like organic ready meals and home-delivery vegetable boxes.
Figures show there has been a dramatic reversal in the numbers of dairy farmers converting to organic farming from conventional methods.
Rises of up to 80 per cent in the price of organic feed for dairy herds mean that hundreds of organic milk producers are now running at a loss. So far this year, farms which were undergoing conversion to organic, and were capable of producing five million litres of milk, have abandoned the process and returned to fertiliser-intensive, non-organic farming.
The situation has prompted warnings of shortages and a "mass exit" by existing organic producers unless retailers agree to increase the farm-gate price paid for milk, to ensure farmers can cover rapidly escalating costs. For non-organic dairy farmers, joining the organic movement is no longer an attractive option.
The cost of feed – much of it sourced from as far away as China – has increased by between 50 and 80 per cent to about £400 per tonne. The 36p per litre that an organic farmer receives for milk no longer meets outgoing expenses, while the 28p per litre received by conventional farmers, which represents a substantial increase from the 16p they were receiving 12 months ago, makes non-organic dairy production more attractive.
