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NODPA E-NEWSLETTER | June 2, 2009

A Canary In The Coalmine?

Organic dairy is one of the most common entry point for consumers when they start purchasing organic products. It also seems to be one of the lightning rods for change, media attention and questions around organic integrity.

Within organic dairy, we are experiencing our first oversupply of raw milk. With it comes all the complications of how best to use a perishable product while still providing a profitable and sustainable future for producers and processors. The problems we are experiencing are common among conventional agriculture (surplus driving down price to producers and creating financial difficulties) but have not been experienced on a large scale in organic production.

In organic dairy, we are no longer immune to downward fluctuations of price and processors exploiting producers who lack experience in dealing with contracts. After a decade of exceptional growth, and, after lowering their pay-price by $1/cwt in February, Organic Valley will institute a quota system on July 1. Under the quota system they will only pay an organic price for 93% of milk produced based on the last three years records of monthly production, and $15 /cwt for anything above this base ($12/cwt less than the organic price).

Horizon Organic cut their Market Adjustment Program (MAP) payment by $1/cwt and are asking for a 7% voluntary reduction in production. HP Hood, with their Stonyfield organic milk brand, is ruthlessly dumping producers in New England and the midwest (the latest count is around 60 producers leaving organic production), cutting the MAP by $1/cwt and asking for a voluntary 7% reduction in supply.

We have advocated for and do need supply control but we have lost the opportunity to be proactive about it. A quota system should be introduced when producers’ pay price is high so you trade production for better pricing. Introducing it now is the worst of both worlds and will again affect smaller operations more than the large ones that are better able to absorb a drop in gross income.

Is this the future for other commodities in organic as they reach a scale large enough for the mass market? …… is this the canary in the coalmine?

It appears that the cost of oversupply due to aggressive marketing and recruitment will be on the backs of committed producers, while processors and marketers have to slightly tighten their belts and continue on with their wages and benefits.

At the same time, many have asked whether the problem is with poor enforcement of organic regulations by the National Organic Program (NOP). Without the larger dairies using little or no pasture, supply would have grown slower and would more accurately reflect a sustainable utilization of fluid and manufacturing organic milk. Up to a couple of years ago, none of the large milk companies wanted prescription in defining the access to pasture, which allowed these large dairies to become certified by inspectors that had little knowledge of organic livestock. Now those same dairies are selling their cows and cutting production because of the surplus.

Is this what the next generation of organic producers will look forward to?

We have an incredible opportunity, with support from the USDA, to enforce the organic regulations but that doesn’t negate our responsibility to get our own house in order and ensure excellent representation for producers in our growing industry.

For more details on pay price and some interesting USDA graphs and charts, click here.

For an update on NODPA’s 9th Annual Field Days for August 13th and 14th at Roman Stoltzfoos’ family farm in Kinzers, Pennsylvania, click here. The event is coming together very well and should be a great opportunity to learn new skills, better understand some old ones and visit with some great folks in a magnificent setting.

The NOSB meeting has come and gone. The members of the Board can never receive enough praise for their dedication and hard work on behalf of us all. They very patiently and respectfully spend at least ¼ of their time at these meeting being “educated” by those of us who are as equally committed and definitely think we are more “knowledgeable” about everything organic, whether or not it is something on which they can have an impact! We thank all the members for their continued hard work. For a summary of what transpired at the NOSB May 2009 meeting, click here.

If you have aspirations to become the Director of the NOP as it moves into its own department under USDA Agricultural Marketing Service (AMS), click here for more information. Perhaps you don’t want to move to Washington, DC, but prefer the New Hampshire countryside. If so, Kevin Brussels’ old position is available at University of New Hampshire Organic Dairy Farm. More details are available at the link above.

The hot news from NRCS is that most states have extended the deadline to sign up for EQIP organic conversion until at least June 12. Despite the name of the initiative, it is open to already certified farmers and it is a great opportunity. Please take the time to at least glance at the details to see if your operation could benefit from this unique opportunity to improve the fertility of your land and your ability to maximize its potential. MORE >

As you navigate or help others navigate the increasingly complicated world of organic dairy, NODPA and FOOD Farmers will continue to interpret the organic dairy world from an independent producer perspective. We will continue our work advocating in Washington DC and wherever our voice can be heard, providing the producer voice to consumers, processors and politicians. NODPA website and NODPA News are a great resource with plenty of information on many issues critical to organic dairy. Please use us and our resources whenever you have questions or concerns.

Ed Maltby, NODPA Executive Director

News, Stories & Events

Milk Quota’s – What should we look for?
With the introduction of quotas by Organic Valley, we list some areas to look at when considering any proposed quota system from the milk companies. MORE >

Making the Most of Your Milk Check
What Dairy Farmers Need to Know About Assignments
By Jill E. Krueger, Farmers’ Legal Action Group, Inc.
MORE > (in PDF Format)

Profitability of Organic Dairy, 2007
The results of an on-going financial analysis of Vermont’s organic dairy sector by UVM and NOFA-VT indicate farms in the study averaged $18,522 net farm earnings, a 0.5% return on owner equity. Learn more >


NODPA NOTES

Advertising Space
Still Available in July NODPA News

The deadline for securing ad space in NODPA's informative bimonthly newsletter is June 15.

For more information on ad rates and sizes, click here.

To reserve a space, contact Lisa McCrory at:

802-234-5524 or email: lmccrory@hughes.net

SAVE THE DATE:
NODPA’s 9th Annual Field Days And Producer Meeting
Practical Tools for Efficient Organic Dairy Farming In These Touch Economic Times
Noon Thursday August 13 5 pm Friday August 14th

Spring Wood Organic Farm, Kinzers, Pennsylvania

NODPA Field Days will return to Roman Stoltzfoos’ family farm for the 2009 Field Days. The first Field Days was held at Spring Wood Farm 9 years ago this August, and we are returning to walk the fields again, with the always interesting commentary of Roman and his family.
Learn more >

GRAIN MARKET UPDATE
Added June 1, 2009
The latest corn and soybean prices, and grain price trends over the past four years. MORE >

ORGANIC MILK PAY PRICE UPDATE
New England pay price since 2006, trends in organic fluid milk sales for the past four years, and new data comparing conventional and organic prices. MORE >

Organic Dairy Research and Outreach at WCROC in Minnesota
The University of Minnesota will become the first land grant in the Midwest to manage an organic dairy herd that is dedicated to research and education. The growing organic sector in Minnesota will soon benefit from information that is tested by rigorous science. More on this initiative >

Update on Dairy Management
Research at Cal State Chico
The CSU Chico Organic Dairy Unit is now into its 3rd lactation as a seasonal, managed intensive grazing, organic dairy operation.
Learn more >

Upcoming Events

Check out our comprehensive listing of upcoming conferences, workshops and other events. Click here for details.

New Classified Ads: Updated June 2

Click here for the latest classifieds:

Animals
For Sale: Three Organic Normande cross heifer calves from a seasonal 100% grass fed herd. 1 to 3 months old. Certified Organic cross bred dairy cows, heifers, and calves from 100% grass-fed herd. Future oxen? Two Dutch Belted bull calves born 2 weeks apart. "Lillith" ... Gorgeous certified organic hereford/jersey cross ... 8 months old ... Just shy of 500 pounds ... Sweet, friendly, easy to handle. Wanted: Looking for well bred registered holstein bull with pedigree available, ready to breed heifers.


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