Shortages of organic milk in southern Europe is hindering growth in the organic dairy products market, report market analysts Organic Monitor this week.
New research by the company shows that although market revenues expanded by 37.6 per cent in 2001, higher growth would have occurred if there were higher volumes of organic milk production in the region.
In a new report Organic Monitor examines the organic dairy sector in Italy, Spain and Greece. These three countries have 1.4 million hectares of organic farmland, accounting for 38.8 per cent of organic farmland in the EU. However most of this organic farmland is used to grow organic fresh produce like fruit and vegetables, olive oil and wine. There is an absence of organic milk production in the region and this, according to the report, is responsible for the underdeveloped state of the organic dairy industry.
All three markets are highly dependent on the importation of organic dairy products due to low interest in organic production methods by dairy farmers. The Greek market is the most import reliant because the country was the last 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.
Italy has the largest market for organic dairy products, valued at €122 million in 2001. The market has reported high growth since 2000 due to Italian dairies stepping up production levels to meet growing interest from the major retailers. Consumer demand has outpaced domestic production in Italy with significant quantities of all organic dairy products imported since the mid 1990s. Up to half of the organic milk used by Italian dairies for processing was imported in 2000.
The report shows that although Italy accounts for the largest revenues in southern Europe, in the near future the highest growth will occur in Greece and Spain. According to the report the continuing increase in dairy farmers converting to organic agriculture in these countries will boost organic dairy production. The Greek market is to show compound annual growth rate of 51.9 per cent over the forecast period, such exceptionally high growth reflects the fact that the market started from a very small base.