Organic Dairy Seminar

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Organic Dairy Seminar

• Presented by
• Alberta Milk

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Organic Dairy Seminar

• Opening Remarks
• Organic Certification Process QMI
• Organic Dairy Farming Organic Meadows Inc.
• Retailers/Processor Perspectives Organic
  Meadows Inc.
• Report from the Organic Committee sourcing
  organic feed, cropping and treatment options
• Producer Panel open discussion

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Organic Dairy Seminar

• Organic Dairy Seminar Highlights
• Why are we here
• Demand for organic products
• Canadian dairy production
• Next Steps

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Organic Dairy Seminar

• Background
• Section 6(a) of the Alberta Milk Plan Regulations
  states the purpose of the plan is to initiate
  and carry out programs to commence, stimulate,
  increase or improve the production or marketing,
  or both, of the agricultural product.

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Organic Dairy Seminar

• Alberta Milk Strategic Business Plan
• Goal 3 To develop and implement programs that
  encourage dairy product consumption
• Pursue opportunities to expand the dairy through
  the development, adoption and introduction of new
  products, markets and technologies.

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Organic Dairy Seminar

• Alberta Milk activities
• Staff performed a review of organic policies and
  procedures across Canada
• Chairmans message Sept06 Milking Times
• Fall 2006 meetings highlighted interest of
  several processors in organic milk

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Organic Dairy Seminar

• Board asked working group to investigate
  opportunities for organic milk
• Several policies were already in place the
  segregated milk policy and the organic lease
  policy
• Board recommended an Organic sub-committee of the
  working group

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Organic Dairy Seminar

• New Product Development Working Group
• The key roles are
• a. To advance or support the development of new
  products by Alberta processors vs. Alberta Milk
  developing new products.
• b. To take advantage of what has happened in
  other areas learn from the experiences in other
  jurisdictions.
• c. NPD must generate a return to producers

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Organic Dairy Seminar

• Organic Sub-committee Role
• To determine interest in organic production and
  processing
• To determine mechanisms to facilitate organic
  production
• To take advantage and learn from other
  jurisdictions
• To investigate various structures or mechanisms
  to facilitate risk and revenue sharing

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Organic Dairy Seminar

• Segregated Milk Policy Highlights
• Allows for the segregation of organic milk from
  conventional milk
• Producer pays any costs above the highest
  provincial HL rate
• Must be transported by persons appointed by
  Alberta Milk

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Organic Dairy Seminar

• Organic Lease Policy Highlights
• For new producers who want to get into the
  production of organic milk
• Quota is available to lease from the Board based
  on average lease rates for the previous 12 months
  discounted by 2.50/kg (MSQ) and 25 for Fluid
  quota. This rate is set for a 1 year period to be
  reviewed the following year. Quota lease ratio
  similar to WMP ratio 48 MSQ, 52 Fluid Milk

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Organic Dairy Seminar

• Retail Facts
• Value of organic milk sold through the grocery
  channel in Canada for 2006 - 18.3 million
• 1 share of total milk and 32 growth from
  2005. Total units sold up 21 from 2005
• Overall organic foods grew 20 in Canada as
  compared to a 2-3 growth for conventional foods

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Organic Dairy Seminar

• Retail Facts
• 3 triggers for entry to organic market
• Health, children and social influences
• Milk and yogurt are gateway products for organics
• Consumer perception that organics are more
  healthy.
• Social influences include animal and
  environmental welfare issue

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Organic Dairy Seminar
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Organic Dairy Seminar Overview of Organics - DFC

• The recent press over food safety is being
  reflected in consumer opinions 70 are concerned
  over the food supply chain in Canada
• The penetration of Organic products in Canada has
  reached the majority of households with almost
  60 awareness.
• Half of Canadians claimed to have bought an
  organic product in the past year.
• The primary categories being purchased are fruits
  and vegetables but Eggs, Dairy, Breads, Cereals
  and Meat top the list
• The primary reason for purchasing Organics is
  safety by eliminating or minimizing the use of
  chemical pesticides and artificial fertilizers

Source ACNielsen MarketTrack estimates, National
Grocery Banners, 52 weeks ending August 2006.
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Organic Dairy Seminar Presence of Organics in
Grocery 2006

• 54 of organic products available are shelf stable

Source ACNielsen MarketTrack estimates, National
Grocery Banners, 52 weeks ending August 2006.
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Organic Dairy Seminar Presence of Organics in
Grocery 2006

• Organic sales are growing rapidly

411,586,721
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320,495,165
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Source ACNielsen MarketTrack estimates, National
Grocery Banners, 52 weeks ending August 2006.
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Organic Dairy Seminar Presence of Organics in
Grocery 2006

• While growing much faster than grocery products
  in general, organic foods still represent only a
  small fraction of the total value of foods in the
  marketplace

Organic Foods Share of All Foods 2005 0.7
2006 0.9
Source ACNielsen MarketTrack estimates, National
Grocery Banners, 52 weeks ending August 2006.
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Organic Dairy Seminar Presence of Organics in
Grocery 2006

• Of the 411.6 million accounted for by certified
  organic foods selling through the grocery
  channel, about 38 is Fresh Produce, 18 is
  Beverages (principally Soy excl. milk) and 11 is
  Dairy Products

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The Question Canadian Organic Consumer 2005

• How often have you purchased organic grown food
  over the past year, that is food certified as
  having been produced with absolutely no chemical
  pesticides or antibiotics?

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Canadian Organic Consumer 2005
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Organic Dairy Seminar Number of Producers - 2005
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Organic Dairy Seminar Number of Head - 2005
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Organic Dairy Seminar Production by Volume
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Organic Dairy SeminarOrganic Milk Production in
Canada 2000-2005
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Organic Dairy Seminar

• Next Steps Post Organic Seminars
• Serious expression of interest by individual
  producers - 100
• Alberta Milk dialogs with producers and
  processors to determine opportunities for organic
  milk production in Alberta

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Questions?