Organic milk producers have continued to scale back on production as costs remain at high levels while prices have declined.
In the milk year so far - April to September - organic production has fallen by 15%, which is a total of 35 million litres, new AHDB analysis shows.
While high input costs have been problematic, some organic farmers have reported greater challenges with organic feed costs and availability.
This may have prompted some farmers to feed more forage as opposed to hard feed and reduce their herd numbers, the levy board said.
And some organic milk productions will have switched back to conventional production.
AHDB reported in July that organic demand has been more limited this year as consumers continue to be more price-sensitive and trading down.
The latest data indicates that this trend has continued with organic dairy demand falling by over 14% year-on-year.
Although production decline is in the double digits, there are some signs the decline may be slowing – whilst year-on-year declines were at 17% in April these had fallen to 12% by September.
AHDB dairy analyst, Susie Stannard, warned that organic milk production may take 'months, if not years, to return' as consumer confidence was 'currently fragile'.
"The big question for producers and processors will be how long this slump in demand is set to continue," said AHDB analyst, Susie Stannard.
"Organic producers will need to work even harder to justify their premium to consumers, pushing taste, environmental, time at pasture and health benefits to attract those more affluent consumers who are still willing to pay more.
"More added value products such as dairy drinks offering health benefits could be a beneficial channel," she explained.
"Exploring export opportunities to markets with a more pronounced interest in organic produce will be even more vital in the months ahead whilst we wait for domestic demand to build again."
