Boom and bust in the organic milk market is a thing of the past, according to major raw milk supplier Omsco.
Demand growth has halved from recent highs of nearly 50% in the year to March 2006, but retail sales are not losing steam, claimed Richard Hampton, sales and marketing director at Omsco.
The supplier's annual market report said organic liquid milk, yoghurt, cheese and other products would soak up 375 million litres in the 2006/07 milk year, which ends in two weeks. Hampton called the 23% rise in demand "a return to underlying growth".
"We predicted growth would slow and it's done so," he said. "It's what we need to get back ahead of the curve in terms of production. Buyers shouldn't be concerned."
Omsco's forecast for 2007/08 demand is only 18% higher at 443 million litres. But Hampton predicted a return to promotion and stronger growth from 2009, once domestic milk production had increased.
Some 85 million litres of production have entered conversion this year and should be available in 2008, making further recruitment unnecessary until the autumn. In the meantime, imports of organic milk are expected to triple to some 20 million litres a year, plugging the domestic shortfall.
Hampton said imports were an unavoidable part of growing the market while British dairy farmers caught up. "We're still 97% self-sufficient, and imports should fall to near zero in the 2008/09 milk year."
He pointed to the 20% increase in organic milk prices at the farmgate as the reason for the flood of interest in going organic.
"It shows how far off economic production we started. A key priority for this year is to ensure cost increases are recovered from the market."
And with organic feed prices 100% higher on the year, costs were still going up, he said.