How sustainable is organic milk?

By Jim Cornall contact

- Last updated on GMT

The European Milk Board says producing organic milk isn't profitable for farmers in Germany.
The European Milk Board says producing organic milk isn't profitable for farmers in Germany.

Related tags: EMB, Milk, Organic

According to the “Ökobarometer 2019” survey on organic food products conducted by the Federal Ministry of Food and Agriculture (BMEL), the demand for organic products from German consumers keeps growing.

Social standards and a fair income for producers are cited as additional reasons driving the decision to buy organic.

But the European Milk Board (EMB) asks if these products – especially when it comes to milk – are really economically and socially-sustainable?

The EMB said producers in Germany were paid an average 47.17 cents ($0.558) per kilogram of organic milk for the marketing year 2019/20. However, production costs amount to 64.63 cents/kg ($0.765), meaning producers were facing a cost shortfall of 17.46 cents/kg ($0.207).

Over the five years from 2014/15 to 2018/19, organic dairy farmers spent an average 51.70 cents ($0.612) on farming inputs and general operating costs without wages. This means farm managers and their families were left with 8.41 cents ($0.0995) per kilogram of milk in hand as remuneration for their work.

EMB organic chart
Chart: EMB

The EMB said this corresponds to an hourly rate of about €7.62 ($9.01), which is below Germany’s standard minimum wage. According to the cost forecast for 2019/20, the EMB estimated the hourly wage equivalent this year would even be around €7 ($8.28) per hour. The EMB argued this shows organic milk cannot really be considered socially and economically sustainable.

However, the cost shortfall is not just an issue for producers in Germany, as Kjartan Poulsen, EMB vice-president and organic dairy farmer in Outrup, Denmark, explained.

“Like in the conventional sector, there is an increasing deficit between farm-gate price and production costs for organic milk in many European countries. It will be impossible to achieve the European Commission’s Green Deal objective – 25% organic farming by 2030 – with this ground reality. A significant increase in sustainable organic production in the EU can therefore only remain a pipe dream.”

Related topics: Markets, Fresh Milk, Pricing Pressures

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