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Global Organic Milk Production Market Report 2018
Global Organic Milk Production Market Report 2018
This report outlines KPMG research on the state of the current global organic milk production market compared to the conventional milk production market. It reveals the key challenges impacting the future of supply and how the industry needs to position itself for growth.
Why does Organic cost more to produce?
The cost premium of Organic milk can be broken up into the following three categories:
- Input cost premium – Increased costs associated with adhering to the standards and principles of organic farming. The increased cost differs depending on factors such as the local cost of sourcing organic inputs and land management practices.
- Scale constraints – Organic dairy farms have reduced economies of scale compared to conventional farms due to smaller farm size.
- Farming intensity – Less milk is produced per cow on organic farms compared to conventional farms.
Key challenges for growth
This report identifies a number of challenges that the organic dairy industry needs to address to position itself for growth. These include meeting organic standards over time and across different jurisdictions, availability and cost of organic inputs and increasing competition from alternative products for retail premium such as plant based and specialty dairy drinks.
