Tasmania’s organic dairy industry could see significant growth over the next few years as another major processor is getting on board.

This week Australian Consolidated Milk started collecting organic milk from three Tasmanian farms.

ACM will initially be sourcing about 2 million litres a year of organic milk from the state, but future volumes can grow.

ACM currently manages 450 million litres of milk a year. Of this 25 million litres is organic and this is expected to grow to 45 million litres with more farmers in Victoria in the next 18 months.

ACM general manager Peter Jones said the company aimed to grow its organic supply, including in Tasmania.

“We’ve been looking at organic over here for a couple of years, but it’s really exciting for us to finally make the move.”

“We think Tasmania is perfectly situated for organic farming. It certainly fits the clean and green image.

“Quite a few farmers here are reasonably self- sufficient with good rainfall and great soil so they can produce good quantities of milk without any synthetic fertiliser inputs or herbicides and pesticides.”

The milk will initially be processed at the Ashgrove factory at Elizabeth Town.

If enough supply can be secured, Mr Jones said the milk could be transported to ACM’s new drying facility in Victoria. ACM also has supply agreements with Bellamy’s Organic.

Tasmanian farmers signed up for multi-year contracts so far are Geoff Atkinson, Kevin Frankcombe and Matt and Andy Jackman.

The contracts have a minimum price of $8 per kilogram of milk solids. ACM currently pays its organic suppliers $8.55/kgMS but Mr Jones said the plan was to increase this.

While the organic market is growing at around 14 per cent across the globe each year, Mr Jones said a main impediment to further growth was price.

“What we’re looking to achieve is more scale through the business, so we can still pay our farmers a really good price, but it means we can get products on shelves at a level that’s affordable to the consumer.”

Consumer demand in the domestic market is outstripping supply and organic dairy products are being imported.

Geoff Atkinson is passionate about organic dairy farming and he is thrilled to see the industry gaining momentum.

“It’s taken a lot of work but we’re getting there now.

“To work with a company like ACM is fantastic because they have the markets and the potential is huge. We could sell 100 million of litres of milk tomorrow if we could get it.”

Mr Atkinson said the products available and support in place now made conversion to organic easier than before.

“Once people go through it, they realise it’s not as hard as they first thought it would be”.

To read more on the Australian dairy industry, click here.