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US Likely to See Organic Milk in Excess Supply
A recent report "World Organic Foods And Beverages Report (2006)" by
RNCOS has observed that US organic market will decline from its current
CAGR of over 16% in coming years but still, the country is anticipated
to account for a major share in the global revenues in the prevised
future.
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According to Reuters, after remaining undersupply for years, organic
milk is projected to come in large supplies in the US market due to a
change in regulation and high profit margins that are motivating more
farmers to adopt organic milk production. Dairy processors and
distributors in US are quite happy with the news as it gives them an
opportunity to expand their market and offer more products based on
organic milk.
The regulation was changed in 2006 when a farmer, Arthur Harvey, from
Maine, US, filed a suit demanding more stringent rules to govern the
production of organic milk. The "Harvey Rule" that will come into effect
in June 2007, needs farmers to give 100% organic grain to their
livestock, as against the earlier 80% organic and 20% conventional grain
standard.
Some estimates say that dairy industry is poised to see an increment
of atleast 40% in supply of organic milk in 2007 from last year's 20%,
leaving around 24.5 Million Gallon as excess supply.
"The oversupply situation is going to result in a pretty competitive
marketplace. Until last year, we were in a supply constraint situation.
We weren't innovating at all," said Molly Keveney, a spokesperson for
Dean, owner of the best-selling Horizon Organic brand of milk, reports
Reuter on May 13, 2007.
Organic powdered milk, cheese, yogurt, and ice creams are projected
to occupy more shelve space as dairy processors look to use the excess
supply. However, organic milk's consumer prices are not likely to fall
as the industry anticipates the oversupply as a short-term phenomenon.
According to RNCOS report "World Organic Foods And Beverages Report
(2006)", organic dairy products had a share of around 13% in the overall
organic food market. The market for organic products is poised to give
outstanding results in the future on the back of strong growth in the
organic milk sector.
The market research report discusses the worldwide organic food and
beverages market in detail by providing a country-wise analysis. A
comprehensive overview of the products, distribution channels, area
under organic cultivation, and future outlook of all markets has been
given.
About RNCOS E-Services Pvt Ltd.:
RNCOS, incorporated in the year 2002, is an industry research firm.
It has a team of industry experts who analyze data collected from
credible sources. They provide industry insights and analysis that helps
corporations to take timely and accurate business decision in today's
globally competitive environment.
For more information visit:
http://www.rncos.com/Report/IM042.htmm
Current Industry News:
http://www.rncos.com/blog
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