Scandinavia’s main dairy company, Arla Foods, is having trouble getting rid of its organic milk, according to an article in Danish daily newspaper Berlingske Tidende. Some 65% of the organic milk is just mixed in with the normal milk, yoghurt and cheese and thus not sold at premium prices. Arla Foods is therefore paying organic milk producers less for their milk.
The organic wave in Denmark has already stagnated. One milk producer only has applied to go organic next year. Many farmers have converted to organic over recent years, after pressure from the government, and from retail. Arla has encouraged them by paying extra for their milk.
According to Ritt Bjergaard, Denmark’s Food Minister, the over-production is the dairy giant’s own fault. “They have simply persuaded too many farmers to convert to organic without the market being able to bear it. It should have been a gradual development instead, where the market could keep up,” she said.
Arla Foods admits that it has tied itself to agreements to buy so much organic milk. “We can’t just increase or decrease production, depending on the interest from consumers. We have to cope with periods where we have a lot of organic milk,” said Knud Erik Jensen, deputy chairman for Arla Foods.
This year Arla Foods will receive 300 million kilos of organic milk. But the company only sells 30% of it as organic, with 4-5 % exported outside Scandinavia.
The Danish Dairy Association’s marketing campaign to get more consumers to drink organic milk has been a total failure. Organic milk takes 25% of the Danish market today, practically the same as when the campaign started. Now the association is working hard to start up another campaign to market a wider selection of organic dairy products instead.