Müller UK & Ireland has moved to safeguard supply of organic milk and capitalise on rising shopper demand with a new pricing model for farmers in its Müller Advantage sustainable farming scheme.
The processor’s tailored pricing model – paying a premium above the cost of production – aims to take into account a wide range of factors contributing to recent falls in organic milk production, including fluctuating organic input costs, succession challenges, labour costs and the investment required to help reduce on-farm emissions.
Defra data shows organic milk production fell by 7% between 2023 and 2024, with a report published by Kite Consulting last August warning the sector was on a knife-edge. Analysis by AHDB shows some 1.5% of dairy cows in the UK were in an organic system in 2024, down from 1.8% in 2022, with the sector now standing at 48,000 head.
But with retail sales of organic dairy increasing – with data from the Soil Association’s Organic Market Report showing a 6% jump in sales between 2023 and 2024 – Müller said it now “recognises that the current offering does not deliver the stability, confidence and competitiveness required for long-term security of supply”.
Reducing emissions
Alongside its new pricing model, organic farmers would also benefit from bespoke workshops to help organic suppliers further reduce emissions on farm under the Müller Advantage scheme.
Eligible organic producers would also continue to participate in Müller’s Next Generation and its new Fast Track programme – described as a “groundbreaking initiative” targeted at decreasing carbon emissions by introducing real-time data analysis on farm.
With its new approach, the dairy giant said it was “confident it can help supplying organic farmers become less exposed to price volatility”, creating the conditions to grow and invest in their business, which in turn would provide greater resilience within the supply chain.
“The future of the British organic dairy sector is at risk,” said Müller Milk & Ingredients head of agriculture Richard Collins.
“Production has gone down over the past five years, with many hard-working farmers either leaving the industry or switching to non-organic methods. And as organic demand remains strong, we have to find new solutions, that are fully supported by our retail partners, to protect the long-term security of supply of organic milk.”
The supplier’s new offering, therefore, would “provide stability, competitiveness and long-term confidence for our organic supplying farmers”, Collins suggested.
“If we get that right, it not only builds supply chain resilience, but creates the conditions for further investment and innovation across the sector.”
Adam Stanbury, a Müller Milk Group board member and organic farmer, said it was “fantastic Müller have listened to and recognised the unique issues facing its organic supply group”.
The dairy giant had been keen to work with its farmer group “to find a sustainable solution for the whole supply chain”, he added.
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