cows in field

Feed and Pay Price July/August, 2021

By Ed Maltby, NODPA Executive Director

Sales of organic milk fluid products has increased slightly year to date. Total packaged fluid milk products sales of 3.6 billion pounds were shipped by milk handlers in May 2021. This was 4.3 percent lower than a year earlier. Estimated sales of total conventional fluid milk products decreased 3.9 percent from May 2020, and estimated sales of total organic fluid milk products decreased 10.6 percent from a year earlier. A better comparison would be to May 2019 which had 221 million pounds in sales of organic fluid milk products, 2 per cent lower than 2021.

The Agricultural Marketing Service (AMS) reports estimated US sales of total organic milk products for May 2021 were 225 million pounds, down 10.6 percent from May 2020 but only down 0.4 percent year-to-date. Organic whole milk sales for May 2021, 104 million pounds, were down 8.0 percent compared to a year earlier and 0.7 percent lower compared with year-to-date 2020. Reduced fat milk (2%) sales were 73 million pounds, down 16.3 percent from the previous year, however are up 1.5 percent year-to-date. See chart.

The reporting from the Federal Milk Marketing Order 1 (FMMO 1) for the utilization of organic fluid milk in June 2021 shows a leveling off in growth after an aggressive start to the year. Utilization of organic milk in FMMO 1 is approximately 13% of total fluid packaged milk sold and therefore a key indicator of sales. Organic Whole Milk increased utilization over June 2020 by 4% and combined Non-Fat organic products increased by 3%. Utilization of all organic dairy fluid milk products in year to date was up 11% over 2020.

Utilization of Organic Fluid Milk in Federal Order 1 – Northeast in million pounds


Whole Milk

Increase/Decrease over 2020

Increase/Decrease over 2019

Combined Non Fat products

Increase/Decrease over 2020

Total organic products

Increase/Decrease over 2020

















































In a letter dated July 9, 2021, Pool handler Dairy Farmers of America, Inc. (DFA), Agri-Mark, Inc. (Agri-Mark), and Boonville Farms Cooperative, Inc. (Boonville) received a temporary authorization from allowing pool handlers to dispose of surplus milk at a farm or non-plant location. The period covered by this action was June 1, 2021, through July 10, 2021. In their request, DFA noted that production has not changed appreciably, but that regional processing capacity has been severely impacted by the effects of the COVID-19 pandemic. Access to food service businesses is still limited in some cities as public safety orders remain in place. Labor shortages have further intensified the capacity loss, with processing plants not able to fully staff all shifts and haulers lacking enough drivers to keep up with milk pickups. There is no data about how these issues have affected organic milk processing although any dumping of organic milk would need to be paid at the same rate received if there was processing available.

Anecdotally, it has been reported that that there are termination letters headed out to 23 Maple Hill producers in DFA’s network that tell them their milk will no longer be needed after Jan 2, 2022. Those are just the farms with DFA, so there may be more. “Logistics” was the reason cited.

Upstate Niagara Cooperative reports that they continue to experience strong growth in their organic supply but this growth is outpacing their commercial ability to market all of their supply as organic. This is increasing balancing costs against the organic program. The Board of Directors of the Cooperative approved the following changes to their Organic Pay Program, effective with milk shipped starting August 1, 2021:

  • The Volume Premium will be cut by 50% at all three levels. Retaining some volume premium is important to recognize the efficiencies that have been built into the hauling routes.
  • The Regional Market Adjustment Premium will be set at -$0.25/cwt.
  • The Seasonal Premium will be reduced from $2.00/cwt. to $1.00/cwt. for milk shipped from October 1, 2021-December 31, 2021.
  • The Incremental Growth Premium will be reinstated but will now be utilized to disincentivize growth. This adjustment will be set at -$1.60/cwt. It will be charged against year-over-year growth each month.

Horizon/Danone are again looking at their trucking routes to assess their viability but there’s been no response from their membership relations folks.

A CROPP representative said that they have no plans to change their pay price and are committed to their member owners. CROPP is transparent with its pay price and publishes it on its website- see below.

CROPP Cooperative/Organic Valley - 2021 farm gate pricing



























National Average Quality Premium


12-month Average Price*


*Total solids 12.9%. MW base pricing as determined by CROPP Cooperative's Board of Directors. Subject to adjustment. This is the base price plus, not including market condition adjustments.

The future of McMinnville’s Organic Valley milk processing plant in Oregon that was destroyed by fire in April is uncertain. The Yamhill County News Register reported that CROPP Cooperative remains undecided if and when the McMinnville plant will be rebuilt. Steve Pierson, president of the nationwide coop, owns Sar-Ben Farms organic dairy just south of Newberg, one of 27 Oregon dairies that sent milk to the McMinnville plant. He is reported as saying that Oregon has the second-largest pool of milk in the Organic Valley system, and it is “very high quality milk.” He added that it was clear that the Cooperative needs a processing facility on the West Coast since the McMinnville plant was processing 4 million pounds of milk per week. “McMinnville is definitely an option,” he said. “But it’s not the only option. We’re committed to having to look at all the options. We’ve doubled our commitment to having a facility in the Northwest.” The loss of the plant increased the pressure on other plants already suffering from a lack of capacity as reported above.

A $1 million grant from the National Fish and Wildlife Foundation and EPA is helping fund what organizers hope will lead to the first regenerative organic dairy supply chain in the U.S. in Pennsylvania. The American Agriculturist reports that PASA — along with the Center for Dairy Excellence, Ephrata National Bank, Mad Agriculture, Origin Milk, Rodale Institute and TeamAg — is leading the effort to transform “dozens of dairies into 100% grass-fed organic farms, helping them attain regenerative organic status while at the same time addressing nutrient management concerns in the southeast part of the state, especially Lancaster County.” This ambitious goal will depend on the marketing of the A2 organic grass-fed milk through Origin Milk and whether they can break through into a very tight market on a sustainable level. Origin Milk was founded in 2014 by Adrian Bota. In a June 29, 2020 profile article in Company Week he commented about his previous career in pharmaceuticals, saying, "We were always interested in nutrition and how to use food as medicine." He says the status quo in the dairy industry doesn't allow for nutrition and quality to be a differentiator, which is something Origin seeks to change. "Dairy has been doing very poorly over the past eight to 12 years or so," says Bota. "If you do it right, we can get people back to dairy." The first 18 months involved jumping through a number of regulatory hoops, and the company went to market in the Midwest in 2016. After launching in Ohio and Pennsylvania, Colorado was the third state on Origin's list, partnering with third-generation dairy farmer Terry deGroot of Colorado Cow in Kersey, CO.

Colorado Cow started with about a dozen cows and now has about 100. Bota says he's looking for partners in North Carolina, Texas, Idaho, and Arizona to scale the company region by region instead of centralizing it with a singular national hub. Currently they produce Whole Milk, Chocolate Milk 2% Milk, Heavy Cream, A2 Butter, A2 Cheese, and A2 Ghee. New product categories -- including ice cream, cheese, infant formula, and protein powder could offer other catalysts. "We can always expand and scale-up but continue to be small by offering a diversity of products," says Bota. They are currently paying ‘upward of $40’ per hundred pounds. As past evidence has shown, a $40 pay price for grass fed organic lower producing cows is break even for experienced grass fed producers. Transitioning producers into that market will take time and capital reserves which a million dollar grant will not cover. Tread cautiously, as Terry deGroot admits that he doesn’t yet pay himself a salary.

Feed and weather

At mid-July 2021, drought covered the Upper Midwest, the northern Plains, and almost all areas from the Rockies westward. Conditions promoted the rapid development and expansion of western wild fires during the first half of July. Meanwhile, farther south and east, a slow decline in drought extent and intensity continued. South and east of the northern Plains, drought is now restricted to parts of the Great Lakes and the upper Northeast. This general pattern is expected to continue through October, with further improvements in the central and eastern states, and more expansion and intensification in the northern Plains, Rockies and Far West. Any improvement there should be limited to the southern sections of the High Plains and Rockies, where heavy monsoon-related showers and thunderstorms are expected during the first few weeks of the period. The Crop Progress Report from USDA NASS shows that the pasture and range condition in the northeast is good to excellent; it just needs to stop raining! In the uncertain world of growing organic grain, the prices for feed grains is high, hitting $29 a bushel for feed soybeans and corn around $10 a bushel. Enforcement of regulations will be key to maintain a fair price for domestic grain.

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