Australia’s organic farming industry is looking to grow its base, with current fertiliser costs adding more incentive for some farmers.
Although some farmers have turned away from the system, others are currently enjoying the benefits of organic farming which means they have avoided the volatile and high costs of imported fertilisers.
Australian Consolidated Milk (ACM) chief commercial officer Ryan Reynolds says the organic industry is in good shape.
“We’re actively trying to source more organic milk,” Mr Reynolds said.
“We’ve just put forward an opening milk price about 8 per cent higher for the coming year. The fundamentals for organics are strong going forward.
“The differential between organic milk and conventional milk will be circa $3 a kilo of milk solids into the coming year. That’s a fair premium.”
ACM has the largest organic milk pool in Australia, about 35 million litres.
The figure has been stable for a few years but ACM is hoping to grow to 45-50 million litres over the next few years and is encouraging farms to consider conversion.
“Organic dairy farming provides a stable, premium return to farmers,” Mr Reynolds said.
“There is the stability of three-year minimum price contracts that enable farmers to plan ahead with a known floor price.
He added the organic markets ACM has developed provide a stable return, with a range of value-added retail products and ingredients in diversified categories and markets, and is not exposed to the volatility of straight commodity markets.
Mr Reynolds says converting to organics isn’t too difficult.
“It depends on the existing farm practices,” he said.
“Those farming fairly naturally with low inputs and not using a lot of synthetic fertilisers and pesticides can make a fairly quick transition, in some cases 12 to 18 months, for others it might take three years.
“We find the farms that are interested are already half-way there; they’re in the box seat to make the transition.”
ACM has farms in northern Victoria and Tasmania considering converting to organics.
“ACM is looking to grow the organic milk pool to support further product and market opportunities and has a range of support programs to assist farmers interested in converting their farm to organic dairy production,” Mr Reynolds said.
Wilandra Farms operated by Sandra Jefford and Wilco Droppert at Clydebank near Sale in Gippsland, Victoria has been a certified organic producer of milk since February 2020, after about four years of learning and transitioning the farm to an organic system.
“We believe that milk produced in an organic and regenerative farming system is more likely to be nutritious, free from unwanted chemicals, heavy metals and GMOs,” Ms Jefford said.
“The farming system is better for our soil and other natural resources, and ourselves.”
“We decided in 2016 that we were going to farm organically, which was when the rainfall pretty much stopped.”
Ms Jefford admitted it was difficult going organic in dry conditions. “Our production did decline but the more we learnt, the more we wanted to succeed as organic,” she said.
The shift was prompted by a conference presentation about the negative impacts of glyphosates.
“We weren’t heavy users of synthetics so that aspect wasn’t too difficult for us, but one of the biggest challenges was dropping the grain,” Ms Jefford said.
The farm has now returned to its pre-organic production levels, although with more land and a lower stocking rate.
“It is an expensive farming system for us but I’ve done testing on products and I can see there are significant differences in the fatty acid profile of organic milk and butter,” Ms Jefford said.
“That confirms we are producing a product that has nutrition lost to some extent in the conventional dairy sector.”
Wilandra will continue as a certified organic farm.
“We’re always battling to get a price that justifies being organic but we believe in the system,” Ms Jefford said.
“We still have lots to learn; we’re not perfect organic but we’re constantly improving and overall, we enjoy the farming system and we plan to stick with it.
“We’re farming more naturally. We’ve planted lots of trees, we’re doing multispecies pastures, and we can see the big benefits from this approach.”
She believes the organic system has a strong future.
“I don’t know any farmers who have dropped organic and stayed in dairy. We were recently in New Zealand chatting with an organic person within Fonterra and they were very positive about the outlook for organic dairy.”
While many farmers remain committed to organic farming, some previous supporters have turned away.
Dairy News Australia has recently spoken to two dairy farmers, one from south-west Victoria and one from the north of the state, who had farmed organic for about five years but returned to conventional farming.
They said the initial premium made the effort to farm organic worth it, but the rise in the conventional milk price meant it wasn’t worth the extra effort.
The farmers cited the costs and time involved with being organic, particularly with animal health, and said the price premium no longer justified the lower production outcomes and prohibitive costs.
However, the term `organic’ still means a lot to some farmers, including Schulz Organic Dairy in south-west Victoria.
The Schulz family has been farming near Timboon across three generations for more than 50 years and went organic in 1972.
“At that time, the dairy industry had a milk price collapse and my grandfather couldn’t afford to buy the chemicals needed to farm in a conventional way,” current owner Simon Schulz said.
“My father and I followed that trend and we’ve been farming organically for 54 years.”
Mr Schulz said organic farming meant less reliance on international fertiliser suppliers.
“We’re self-sufficient in that respect so it insulates us from the supply shocks for fertiliser that have hit the market,” he added.
“Our production is around the industry average but we’re not putting in fertiliser that destroys the soil.
“As time goes on, we’re becoming more productive compared to conventional farmers who have to put on more and more synthetic fertilisers and pesticides to get the same return.”
Mr Schulz said one of the benefits of organic farming is the consistent, gradually increasing milk price.
“We’re not seeing a drop in milk price or a bounce around like in conventional,” he said.
The farm is not just organic but focuses on biodiversity with multispecies plants, resulting in significant gains in production based on having diverse pasture species, which increases yields, without the high synthetic inputs.
Mr Schulz said the term organic was a good selling point.
“We value-add ourselves and have our own brand in independent supermarkets. Being organic is a marketing advantage for us as a value-add business.”