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Increase in organic milk production disrupts French market
The production of organic milk in France rose much faster than the demand and that leads to problems. Processors lower the purchase price, downgrade product to normal and halt company conversions. the consumer is also less enthusiastic about organic.
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The total French organic milk pool will increase by almost a quarter this year to approximately 1,35 billion kilos, expects Damien Lacombe, chairman of dairy cooperative Sodiaal, while there is already an oversupply.
The French dairy giant Lactalis has already put a stop to further conversions for this reason. The milk price has been reduced and about 20% of the milk has been sold as conventional in recent months. Lower payout prices have also been implemented at Sodiaal and approximately 10% of the milk has been written down. Up to 30% of the milk has been written down at Coóperatie Biolait, French agricultural magazines report.
It's not just an over-growth offering that's causing the problems. Decreased demand for ingredients for (organic) infant nutrition from China also plays a role in declining consumer sales. Lactalis saw sales of organic dairy in supermarkets drop by 2% in recent months.