In recent weeks, there have been increasing initiatives in France to revive the consumption of organic milk, including appeals to consumers to buy more, a promotion in more than a hundred supermarkets over one weekend, a free pack of Lactel for two packs bought, etc. After growing between 15 and 20% for several years, organic milk sales slowed down sharply in 2021 and even declined for ultra-fresh products such as yoghurt.
As a result, the price of organic milk fell by 2.6% in September compared to 2020. The number of conversions from conventional to organic dairy farmers in recent years partly explains the current overproduction. Between 2017 and 2018, organic milk production actually increased by 35% to 848m litres supplied by 3,295 farms. This year, 900 more producers joined, bringing production to 1.241bn litres, and Cniel expects a further 9% increase by 2022. The result is that all dairies have stopped converting, Sodiaal (18% of organic milk production, neck-and-neck with Lactalis) and the number one, Biolait, (27%) only accept young farmers converting to organic.
“The public authorities have to take their responsibility. They have encouraged conversion, they want 25% of the land to be organic, but they must support the sector,” demands Yves Sauvaget, milk producer in the Manche department and chairman of the organic commission in the Cniel association.
To avoid a disaster next spring, dairies want to limit deliveries. Biolait, which has already been encouraging its suppliers for two years to produce less in spring by paying a premium for the volume not produced, will intensify this measure. “We will cap production so that there are no incentives to produce more to compensate for the drop in prices,” argues Biolait chairman Ludovic Billard.
As the company only collects organic milk, it has little room to manoeuvre to cope with the crisis, while competitors Sodiaal and Lactalis can rely on conventional milk. As long as prices for standard dairy products are high, downgrading from organic to conventional is less costly. So how serious the situation becomes also depends on how prices develop. Sodiaal downgrades 10% of their organic milk, at Lactalis it is 20%.