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NODPA E-NEWSLETTER | November 13, 2011


Organic farming on Martha's Vineyard:
You better believe it!

One of the new categories of diversified farms that have sprung up close to urban  areas, Grey Barn and Farm is owned by Eric and Molly Glasgow, who have a mixed operation that includes 19 Dutch Belted dairy cows which they milk once a day. For more information, click here.

No silver bullets left
Its official – organic dairy is no longer the silver bullet that the early pioneers benefited from ... but is it still part of the ammunition of opportunities that will sustain rural communities and family farms?

With demand for organic dairy rebounding to an 18% growth year over year and milk in short supply, producers should be optimistic about the future. However anecdotal and scientific reports and data paint a different picture for producers. The latest results from the University of Vermont’s ongoing study shows not only a drop in return on assets but also a drop in “accrual income” (net income after a ‘living wage’ of $35,000 has been taken out). All reports are that 2011-12 are going to be worse, even with the small increase in pay price and dividend payments. There is deep concern about how many organic dairies are going to survive this winter with grain prices at an all-time high, availability of organic feed at an all-time low and an increase in the cost of hay between 50 and 100%.

Some advisors are recommending trimming herd numbers to match forage that is now in the barn as supply of reasonable feed is tight and expensive, but for many producers, cows are collateral against debt and producers do not control whether they can sell significant numbers. Nutritionists and veterinarians are advising testing all feed, especially that affected by flooding and extreme weather conditions. Testing needs to be specific or it will be expensive, and producers need to take great care in feeding poor quality or semi-spoiled forage even if it’s ‘all I have.’ For those producers thinking of ‘bending the rules,’ USDA NOP and certifiers remind us all that there can be no temporary variance in the regulations for feeding non-organic feed. The problem in the grain supply, which has been aggravated by lower than average yields and very variable weather, is caused by a significant acreage of corn returning to non-organic production and heavy demand from the poultry industry, which uses nearly 80% of the organic harvest. In the West there are reports that operators of 80,000 acres have given up their organic certification, with similar proportional decreases in organic production in the Midwest, New York and Pennsylvania. Perhaps the only silver lining is that MILC payments are projected to start in February 2012 but even those will be phased out in September 2012 as authorized by Congress.

For more on the results of the Vermont study on profitability, click here.

Farm Bill to be decided in smoke filled rooms by Debt commission?

Whether or not the Super Committee in Congress will reach agreement that can make it through to legislation, major portions of the 2012 Farm Bill have been decided by the chairs of the two committees without any transparency or public input from stakeholders. Even if, as seems reasonably likely, the Super Committee fails, the consensus is that the House and Senate Agriculture committees will use the work already completed as the basis for the next Farm Bill.

Within the Dairy Security Act, which is presumed to be the basis of the Dairy title in the Farm Bill, there is the opportunity for organic dairy to take the initiative and push for programs that relate to organic production costs and market conditions. If the conventional dairy industry has insurance and supply management, it should be as easy to have insurance based on the cost of organic inputs and supply management based on organic market conditions. If USDA is tasked with examining the relevance of the Federal Milk Marketing Orders (FMMO), then the time is ripe to look at organic as a commodity within the orders and an organic pool of milk. There is no thought that this would be used to determine a federal price but producers will have the benefit of accurate data that can be used for insurance programs, supply management, advocating for research dollars, promoting sales of organic dairy in the media and transparency in negotiating a pay price.

The Federation Of Organic Dairy Farmers (FOOD Farmers) recently voted to support staying in the Federal Orders and taking an active role in any discussions about changes in the FMMO to ensure they are more relevant and fair to organic dairy.

For more details on the Farm Bill and its effect on organic dairy, please click here.



2011 NODPA Field Day report

One of the best parts of coming to the NODPA Field Days each year is to reunite with old friends - producers and resource individuals alike - who come back year after year. They are able to share some stories from the farm, talk about their children (and grandkids for many), and enjoy good food and lots of laughs. Every year people come interested in learning something new; giving NODPA constructive feedback; celebrating NODPA’s successes; acknowledging the exceptional work of a few; and ready to hunker down and work harder in areas where progress is slow to nonexistent. Learn what happened and see the photos at:

www.nodpa.com/in_fielddays_summary_111311.shtml

Feed Price updates

The most recent data and conclusions from USDA, AMS, Livestock & Grain Market News are no different from anecdotal reports from producers across the country. Feed and forage prices remain high and availability is an increasing problem.  With the harvest under way, reports on the weight and quality of corn and soybeans vary from state to state, although yields appear to be below average. The factor causing concern is not only the projected price for corn delivered in February, (12.50 per bushel plus transport ($400+/ ton)) but the availability for those that have limited storage capacity or a lack of credit to purchase feed now. The situation is unlikely to change as those grain producers who have returned to conventional production will not be able to make the change back to organic so easily or quickly.
The good news on the demand side is that the reports from the data compiled by the Federal Milk Marketing Orders is that the demand for organic beverage milk is increasing by approximately 18% year over year compared to 2010. Total consumption of fluid organic dairy products in August 2011 was the highest it’s ever been. Retail prices for organic whole and 2% milk as reported by federal milk order market administrators show a slight increase with a range of prices of $2.99 in Denver CO and $4.54 in Minneapolis, MN per half gallon (not including store brand, private label or in store promotion). The price gap between conventional and organic retail price has increased slightly but not significantly. For more details go to:

www.nodpa.com/feed_prices_11_13_11.shtml

-- Ed Maltby, NODPA Executive Director

NODPA NEWS & NOTES

Feed Price Updates

Feed and forage prices remain high and availability is an increasing problem.  With the harvest under way, reports on the weight and quality of corn and soybeans vary from state to state, although yields appear to be below average.
Learn MORE >

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