According to the latest production cost and producer price calculations in the organic sector, producers in Germany received an average 55.55 cents/kg of organic milk in the accounting year 2023/24. However, the production costs, including a fair remuneration for farmers, amounted to 68.53 cents/kg. This means that producers were left with a cost shortfall of a good 19%.
In the accounting year in question, organic milk producers received an average 67.72 cents/kg ; 55.55 cents/kg through the milk price and 12.17 cents/kg in the form of subsidies. Given that farming inputs and general operating costs amount to 54.25 cents/kg post deduction of income from cattle sales, the real income for farmers was a mere 13.47 cents/kg of organic milk. That is just 51% of the income that would be appropriate based on applicable collective agreements. This appropriate income amount was calculated based on an average hourly wage of about 28 euros (including employer contributions). In light of these facts, the slogan socially and economically sustainable does not hold true in the case of organic milk production.
Milk Marker Index for organic milk
The Milk Marker Index for organic milk (Bio-MMI) illustrates the evolution of costs for organic milk production. For the accounting year 2023/24, the MMI for organic milk is 107, which means that the production costs for German organic producers are 7 points higher than in the base year 2020/21 (2020/21 = 100). In comparison, the MMI for organic milk in the accounting year 2017/18 was 95, which means that costs increased by 12 index points in this period.
Price-cost ratio (shortfall)
The price-cost ratio showcases to what extent the prices paid to producers cover milk production costs on organic dairy farms. For the accounting year 2023/24, producers were able to cover only 81% of their production costs through the milk price; this means that the cost shortfall was 19%.
