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Müller UK & Ireland has launched a new pricing structure for organic milk in an effort to stabilise supply and address the long-term decline in production.

The company said the move follows continued pressure on organic dairy farmers, who face higher input costs and price volatility. Since 2020, organic milk output has fallen, with some producers exiting the sector entirely. At the same time, shopper demand for organic milk has increased, prompting concerns over the long-term sustainability of supply.

Developed in partnership with Kite Consulting and Müller’s retail customers, the new pricing model aims to reflect a wider range of cost factors affecting organic farms – including labour, succession challenges and investment in emissions reduction. The approach is part of the company’s existing Müller Advantage programme, which offers incentives to participating farmers.

Müller also plans to introduce additional workshops for organic suppliers focused on lowering on-farm emissions. Farmers will continue to have access to the company’s Next Generation and Fast Track programmes, which support carbon reduction through real-time data monitoring.

Richard Collins, head of agriculture at Müller Milk & Ingredients, said: “The future of the British organic dairy sector is at risk. Production has gone down over the past five years, with many hard-working farmers either leaving the industry or switching to non-organic methods. And as organic demand remains strong, we have to find new solutions, that are fully supported by our retail partners, to protect the long-term security of supply of organic milk."

“With our innovative new offering, it will provide stability, competitiveness and long-term confidence for our organic supplying farmers. If we get that right, it not only builds supply chain resilience, but creates the conditions for further investment and innovation across the sector.”

Adam Stanbury, organic farmer and board member of the Müller Milk Group, said the new pricing model could help rebuild confidence among organic producers and encourage future investment in the sector.