An objective year on year fall in organic milk product availability has confirmed gut feelings about there being less organic milk in the US dairy market place.

This is according to the Agricultural Marketing Service at the USDA, which says high levels of producer movement between processors means “uncertainty” for the industry.

Total organic milk products sales were lower this March than for March 2014 – the first monthly sales decline in over two years.

Limited supplies are “frustrating” for processors wishing to invest capital in expansion but unable to fact the risk of low supplies, explained the AMS.

Lines for processing and further manufacturing are affected, hitting processors of all sizes.

In a markets bulletin, the AMS said: “Some smaller manufacturers without direct supply contracts with organic producers have experienced reductions or stoppage of organic milk components from larger processors.

“Even some larger processors who contract with large numbers of organic dairy producers in many states are now working to address the increasing impact of smaller regional organic processors who are bidding pay prices and incentives higher, seeking to contract producers.”

Industry aspirations to stabilise the organic dairy segment and balance seasonal milk fluctuations cannot be realised with declining supplies, the AMS added.

Source – The Dairy Site