Arla ready to capitalize on what it sees as a major trend in dairy

What are the benefits to EU dairy farmers of a switch to GM free feed?

By Jane Byrne contact

- Last updated on GMT


Related tags: Gm free soy, Milk, Gm

Dairy company, Arla Foods, says it only has ambitions, at this stage, that more of its farmers will convert to GM free feed based on the increasing market willingness to pay the higher price required.

“We want to get our farmers to start thinking about this, to give them some direction. But we are still fine tuning the details of how they could transition to non genetically modified (GM) feed, we would have to take into account the different feed programs that exist in Germany, for example, compared to Denmark,”​ Arla Foods spokesperson, Astrid Gade Nielsen, told FeedNavigator. 

“But we see clear demand in Germany, in particular, for GM free milk products,”​ she said.

Production of GM free milk might allow crisis hit dairy farmers to tap into a premium retail segment. “Such innovation could help producers escape the negative spiral related to lower prices,”​ said the Arla spokesperson. 

Arla is owned by 12,700 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxemburg and the Netherlands.

The GM feeds the company currently uses are in most cases limited to soy, which on its farms translates as between 0 and 10% of the total feed volume.

“We are still working out the sourcing side for a GM free feed model, but farming in Sweden, our home market, has been generally GM free for the past few years and that has been supported by non GM soy from outside of Europe,”​ said Gade Nielsen.

The company also flagged up its huge organic milk pool, for which the feed is, by default, GM free, and said that source, along with its Swedish supply, means that around 20% of its milk pool already meets the demand for non GM feed.

German retailers, said the cooperative, are increasingly demanding GM free dairy products and are ready to pay more for such goods. So Arla, on that basis, would be able to compensate farmers who migrate away from GM inputs.

The dairy company said it would expect to be able to pay an extra €0.01 per kilogram of milk and the market driven compensation will also be paid to all its Swedish farmers, who already use GM free feed.

As opportunities arise in other markets, Arla said it would gradually take on more farmers.

The company is looking to explore what level of demand there is for GM free dairy products in the UK. “All our farmers are equal. We want to create new opportunities in all the markets we operate in,”​ said Gade Nielsen.

The company stressed the move was aimed at capitalizing on the commercial opportunity and did not indicate that Arla’s owners were taking a new stand on GM.

It said it was not closing a door on GM and would continue to monitor the scientific research into the pros and cons of GM ingredients.

German retailer led GM free trend

In October 2015, Alexander Hissting, general manager of the German Association of Food without Genetic Engineering (VLOG), told this publication there was huge momentum in Germany to convert all private label meat sectors to GM free soy:

“The transition to non GM soy is taking place in meat sectors beyond poultry and we are seeing discounters like Lidl and Aldi getting on board. We have a much stronger commitment now from the retail sector overall regarding the use of GM free soy in own label meat, egg and milk products.”

And Dr Ludger Breloh, head of strategic purchases/green products for the Rewe Group, the second biggest retailer in Germany with a presence in 11 other European markets, last autumn said that group and other German supermarkets had begun conversations with their entire supply chains with the aim of having as many private label meat products using GM free soy feed.

He noted an ever-growing consumer demand in Germany, France Austria, Switzerland, Italy and Hungary for GM free goods, saying Brazilian suppliers as well as service providers in South America and in Europe were needed to keep it going and growing.

Last year Deutsches Milchkontor (DMK), Germany’s largest dairy company, decided to follow the retailer trend by converting the over 200,000 Mt of soybean meal it uses to GM free by 2018.

Of the UK supermarkets currently, only Waitrose commits to ensuring non-GM feed is used to produce its eggs, chicken, turkey, farmed fish and New Zealand lamb, according to a report about GM crops produced by the UK’s Royal Society this week.

Figures provided by the ProTerra Foundation and the Danube Soy Association show global production of non GM soybeans was estimated at 56.1 million metric tons (MT) in 2015, 17% of the total soy output.

Out of this, around 5m MT of soybeans are expected to be segregated along the food chain and certified according to non-GMO standards.

The certified non-GMO soy volume is forecast to reach 5.6m MT this year, the highest output since the economic crisis in 2008.

They said the growth in the non-GMO soy volume is fueled by retailers throughout Europe – especially in Germany, Austria and Switzerland – that require non-GMO reared animal products. The aqua feed sector in Scandinavia also contributes to this demand.

Certified non-GMO soy production is concentrated in Brazil, forming 80% of the total volume although India and Europe are playing an increasing role in this area.

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