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NODPA E-NEWSLETTER | March 8, 2012
featured farm march 2012

Corse Farm Dairy, Whitingham, VT

Leon and Linda Corse are the fifth generation to farm on the Corse Farm Dairy in Whitingham, southern Vermont. Leon’s great, great grandfather purchased the 379 acre farm in 1868 and today there are up to 60 cows milked year round with the milk sold to Organic Valley. The herd is mostly Holstein, but includes some Jersey crosses and Red & Whites as well. Production runs about 16-17,000 pounds per cow for the year or about 55 pounds per cow per day.  To learn more about the farm and the family operation please go to:

http://www.nodpa.com/ff_march_2012.shtml

What’s next for the organic dairy farm families? What incentives are there for farmers to increase production?

As the costs of organic dairy production start to reach a new base level, the big question on producers’ minds is about their profitability. Altering production methods and “getting more efficient” is an obvious idea for producers who have the land, financial resources and the climate. As farmers plan for this season’s crops and any changes in farming practices, they are concerned that they are producing and selling organic milk at below their cost of production and are asking processors ‘Will the increases currently in place end in June? Will there be seasonal cuts in the Market Adjustment Premium (MAP)? How will the increase in retail price affect sales and what will the fall pay price be?’

The other question on the mind of farmers is what can they do as individuals or a group to make a long term difference to their profitability and sustainability? A shortage of milk pushed processors to raise pay price, not just an increase in farm costs – empty shelf space is not good for business. Farmers receive too small a share of the retail dollar to be profitable in the long term. Processors need to commit to giving farmers a more equitable share of the retail dollar. The processors have the contractual relationship with retailers and they need to push for a greater return from the marketplace in order to ensure a more proportionate share of the retail dollar goes to farmers.

If shortage on the shelf helps processors pressure retailers, then farmers should consider these ways (and others) to not have a spring flush with increased supply by not producing and shipping more milk:

  • At the current pay-price, feeding grain is not profitable so farmers should feed less grain while taking advantage of the new season’s grazing - even if the volume of milk produced drops. 
  • The beef price is high so now would be the time to cull those high somatic cell cows or the marginal cows, to save money on feed and increase quality premiums which will benefit cash flow. Feeding unproductive cows with high cost grain or forage is not profitable at the current pay price. Whole farm profitability is important, not volume of milk produced.
  • With the high cost of organic protein and energy feeds, farmers should look at the economics of feeding more milk to calves rather than shipping increased volume and buying expensive calf feed. It’s time to run the numbers for your own operation.
  • Consider using milk as a fertilizer to build the soil and increase long term yields rather than purchasing high cost inputs while selling milk at below your costs.

While it’s always tempting to increase production, now is the time for farmers to leverage their limited power to pressure processors to raise pay price. Limiting supply to a level where they don’t lose money while demand is growing gives farmers the opportunity to have more influence in increasing pay price and processors have less cost balancing milk on the conventional market.

Farmers that are member owners of Organic Valley (OV) should play an active role in the governance of the cooperative. The Organic Valley nominating committee recommended two new Board candidates as well as incumbents and sometimes a fresh face can bring a fresh perspective. Perhaps even a nomination from the floor as is allowed under OV rules.

Horizon ‘farmer partners’ need to attend their producer meetings, ask the questions about farmer share of the retail dollar, and Horizon’s plans for an increase in the base price rather than just a MAP. They should share their concerns with other producers and in public forums like Odairy so producers realize that the financial troubles they are in are affecting everyone.

Who benefits from an increase in the
retail price for organic milk?

What is the effect on sales if processors pass on increases in pay price to their retail buyers?

A $2 increase per cwt for farmers will be 9 cents per ½ gallon wholesale increase, and with a 30% retailer mark-up there would be an increase of 11cents per ½ gallon. The mark-up will vary between retailers. This assumes that the processor doesn’t increase their costs over what they are paying producers. 

From December 2010 to December 2011, the average retail price of organic milk increased by 14 cents per ½ gallon, sales increased by 14.3% over 2010 but producers received only an average of $1.25/cwt (6 cents per ½ gallon) of the total retail increase of $3.26/cwt (14 cents/ ½ gallon) for ¼ of the year.

If consumers pay more, how does this money get back to the farmer who they think they are supporting?

For information, facts, figures and charts please go to:

Producing Your Own OP Corn Seed:
Homegrown Strategies for Dealing with the Onslaught of GMO Corn

Jack Lazor is the perennial optimist and is able to draw on his long years of experience to lay out some very clear advice for those wanting to grow their own corn seed. He does admit that “Trans genes are everywhere” and that he has become disillusioned over the last five years about the lack of choice that farmers have in purchasing even 95 day untreated corn seed. While admitting that there is a great deal of windblown contamination and very good reasons for becoming depressed, his article steers us back into the positivity of solving the problem with our own farming skills. For a very good article on saving your own corn seed, please go to:

http://www.nodpa.com/production_forage_producing_
OP_corn_030812.shtml

Quality Forages Need Quality Soils

Gary Zimmer’s article starts with this home truth: “So you want farming to be easy, you want to have fun, and you want to make money. As an organic grazier with those goals, you have to manage for high quality forages.” This first article of a series of three concentrates on the need for healthy soils and taps into Gary’s vast knowledge and experience. For more excellent reading on building soil quality, please go to:

http://www.nodpa.com/production_forage_high_quality
_forage_030812.shtml

‘Got Carbon’ NEFU Carbon Credit Program

Do your farming practices reduce your carbon footprint or sequester carbon? If they do, the New England Farmers Union’s Buy Local Carbon Project wants to identify those practices and develop the methodologies so that carbon credits generated by these practices can be sold in the marketplace. The goal is to create a viable carbon market for New England farmers who participate in conservation practices that benefit the environment and reduce green- house gas emissions. For more information please go to:

http://www.nodpa.com/in_carbon_credit_program_
03082012.shtml

-- Ed Maltby, NODPA Executive Director  

NODPA NEWS & NOTES

Feed price update

Trading in national organic grain and feedstuffs are mixed, with very good demand reported for alternative feed grade grains and moderate demand for all other grains. Offerings of grain were moderate for all types, with the exception of domestic soybeans, for which offerings were light.

Click here to learn more about current feed and grain prices.

Payprice update

From December 2010 to December 2011, the average retail price of organic milk increased by 14 cents per ½ gallon, sales increased by 14.3% over 2010 but producers received only an average of $1.25/cwt (6 cents per ½ gallon) of the total retail increase of $3.26/cwt (14 cents/ ½ gallon) for ¼ of the year.

Click here for more details on pay and retail price updates.

NOP/NOSB/
Organic News

It’s a very active time in organics with the European Equivalency agreement beginning June 1, 2012, which will eliminate a double set of fees, inspections, and paperwork but increase the level of oversight needed. This agreement eliminates significant barriers, and is expected to have a significant impact on the trade of organic products – and many are likely to be finished foods rather than agricultural products.  In February the NOP published draft Guidance on Handling Bulk, Unpackaged Organic Products in response to the USDA Office of Inspector General report on organic dairy. This draft guidance appears to increase the work of certifiers (and their cost) while restricting the choice of producers over who they can use to transport product and livestock. The next meeting of the National Organic Standards Board (NOSB) is on May 21-24, 2012 at Hotel Albuquerque, NW Albuquerque, New Mexico. The agenda has not been released yet, but the GMO issue will definitely be on the minds of those commenting, especially with the new GMO committee making its first report. The phase II of OTA’s campaign for an Organic Research and Promotion Program or Organic Check off program was released in January with plenty of questions from producers.

To read more on all of these activities please click here.

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