Organic dairy growth hit by poor supplies
current levels of demand, and this is hindering growth in the
organic dairy market there.
Supplies of organic milk in southern Europe fall far short of current levels of demand, and this is hindering growth in the organic dairy market there, according to a recent study by Organic Monitor.
Organic dairy market sales in southern Europe grew by 37.6 per cent in 2001, Organic Monitor said, but the actual figure could have been much higher if there had been sufficient supplies.
The report examines the organic dairy sector in Italy, Spain and Greece, where there is a total of 1.4 million hectares of organic farmland. This in turn accounts for a substantial 38.8 per cent of the total organic farmland in the EU. The problem for the dairy industry is that most of the organic farmland is used to produce organic fresh fruit & vegetables, olive oil and wine.
The organic dairy markets in all three countries are highly dependent on imports because of the low interest in organic production methods by dairy farmers there, the report said. The Greek market is the most heavily reliant on imports because it was the last country to implement EU regulations on organic livestock production. It is also the smallest market in the region and accounted for a mere 1.4 per cent of southern European organic dairy revenues in 2001.
In contrast, Italy is the largest organic dairy market in the region, with total sales valued at €122 million in 2001. The market has been reporting high growth since 2000 due to Italian dairies stepping up production levels to meet growing interest from the major retailers, but consumer demand continues to outpace domestic production with the result that import levels remain high. Up to half of the organic milk used by Italian dairies for processing was imported in 2000, Organic Monitor said.
Not surprisingly, because the Italian market is already well developed, the biggest growth in organic dairy sales is likely to come from Greece and Spain in the immediate future. The continuing increase in dairy farmers converting to organic agriculture in these countries will boost organic dairy production, the report said. Greece in particular should show excellent compound annual growth - around 52 per cent - mainly because the market is starting from such a low base.
