Europe's consumers willing to pay more for pasture milk

Wednesday, November 5, 2014

When milk sells as guaranteed from grazing cows, is this catering to consumer animal welfare concerns? Or is it a sales argument for healthier, fresher dairy products? One thing is sure: pasture milk is a major presence on European dairy shelves this year

by NORMAN DUNN

Dairy news this fall includes the message that more than 20 per cent of drinking milk in Denmark now sells under the "pasture milk" label. Dairies in the Netherlands have also put the spotlight on grass-fed cows out in fields all summer and charge a bonus of a few cents per litre for this "natural" product.

Sometimes, the dairy farmer gets more, too. FrieslandCampina, the largest Dutch dairy, processing milk from 14,000 farms at home and in Germany and Belgium, pays its farmers the equivalent of 1.4 cents a litre extra when milkers get to graze for six or more hours per day and for at least 120 days in the year. Cono, a quality cheesemaker also from Holland, doesn't give its suppliers any choice at all. It buys only milk from herds that are grazed naturally all summer.

This is a trend that now stretches from Sweden to Switzerland. Arla Foods, Sweden's biggest dairy, covers two selling arguments with one brand, the label translating as "organically produced pasture milk." At the other end of Europe, the Swiss have introduced labelling that covers the dairy cows' winter feed, too, with more natural sun-dried hay identified as barn feed instead of the more conventional silage.

So who's behind this growing sales concept that guarantees cows get outside every summer? There's certainly something attractive about the idea as far as milk drinkers are concerned. Research in Germany by the University of Göttingen indicates that around 30 per cent of consumers would choose milk labelled as from cows that spend their summers on fresh grass. This is almost double the percentage in the same survey who claim they would buy organic milk. What's more, the Göttingen survey participants say they'd be willing to pay extra for milk from pastured cows – in fact, as much as an additional 10 per cent per litre.

Okay, okay, we know all about consumer surveys where participants say they'll buy more and pay higher prices if what they want for the moment is on the shelves. European agriculture learned the hard way with organic products that consumer survey reactions must be taken with, not a pinch, but rather a shovelful of salt. While the European organic sector expanded strongly to meet the reported steep rise in customer interest, demand in the supermarkets never really lived up to initial promises. Not helping, of course, was the series of global financial crises suffered since the organic movement took off in the 1980s.

Admittedly, 14 per cent of milk produced in Austria and 10 per cent in Denmark is still from organically managed herds. Britain managed only 2.6 per cent on this scale. On top of this, organic dairy sales there dropped by nine per cent between 2011 and 2012 and haven't been showing any great signs of recovery.

Despite the disappointment with organic dairy marketing, the pasture milk concept looks like it is going to last. The trouble with the organic programs is that they're complicated for the non-agriculturalist – or for anyone, come to think of it. For instance, organic milk production systems can include 50 per cent cattle feed from outside the farm in some schemes, or demand only home-grown feed in others. On cow welfare, some schemes allow horns to be removed from cows. Others ban dehorning completely.

On the other hand, the green grass argument couldn't be simpler. Consumers like that. Now, it may well be true that, 20 years ago, no city milk drinker ever even thought about whether cows were outside or in during summer. The marketing departments have sold them the message that it's healthier for cows outdoors, at least when the sun is shining.

It is also not being much mentioned in this context that, outside of Germany and northern Italy, only a tiny percentage of dairy cows are kept inside all year round. In other areas, it's really only the big herds – meaning 400 milkers and up in Europe – that normally even consider year-round housing.

In reality, pasture milk labelling is only selling a concept, a picture of idyllic countryside life, featuring healthy cows, fresh air and high welfare. But it's one that appears to be working well this year in Europe, and bringing a few cents more into the dairy sector. BF

Norman Dunn writes about European agriculture from Germany.