According to the Ministry of Agriculture, Food and Fisheries, British Columbia, the financial returns from the organic dairy farming greatly depend on the demand of organic cow milk by consumers. This is even more important given the fact that the demand for organic milk has witnessed great deal of fluctuations in the past few years. The supply from other producers also influences the price, and hence the profitability.
What are the success factors for organic dairy farming? The Ministry advices the farmers to focus on the following:
- Select the site for organic dairy production, and design of the barn, storage facilities etc., appropriately.
- Ensure a market for the organic milk. Transporting milk to other cities where the price is higher can be beneficial. Hence different markets and marketing channels should be studied and explored to ensure sales and maximize profits.
- Track the costs (direct as well as indirect) involved in organic dairy production at the selected site properly.
- Implement various disease control programs and ensure quality breeding, and feeding practices.
- Increase milk production per cow and keep the cost of feed as low as possible.
Farmers practicing organic dairy production will get higher income than conventional milk production only if they fetch a higher price for the organic milk.
The Organic Centre Wales, University of Wales Aberystwyth, has observed that the price of organic milk should be about 5-6 pounds higher per liter than the price of conventional milk.
In 2001-2002, numerous farmers were granted the organic certification for milk production, in the UK. As a result, the supply of organic milk increased drastically, while the demand increased at a slower pace. Hence the price of organic milk reduced, as a result of which, many farmers were not earning as much profit as conventional milk production would give them. Many farmers, were therefore, since the past few years, reluctant to venture into organic dairy production in the UK.
However, now the demand has increased again and is increasing at a rate of over 30% per annum. To meet this demand, some companies are importing organic milk into UK as a temporary solution. This surge in demand is attributed to greater awareness among consumers about the health benefits of organic milk.
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