cows in field

Pay and Feed Price: September/October, 2021

By Ed Maltby, NODPA Executive Director

Retail sales of organic milk are still going through a pandemic curve, not following any of the usual patterns of organic milk sales so we cannot draw any long-term conclusions from this data. In June 2021, 3.4 billion pounds of packaged fluid milk products were shipped by milk handlers as reported by USDA AMS. This was 6.7 percent lower than a year earlier. Estimated sales of total conventional fluid milk products decreased 6.9 percent from June 2020, and estimated sales of total organic fluid milk products decreased 3.7 percent from a year earlier. Sales of organic milk fluid products has decreased slightly year to date by just less than 1 percent. There are no reports on how much organic milk was used in manufacturing.

The USDA AMS reported that 104 million pounds of Organic Whole Milk at retail was sold in June 2021, an increase of 2.1% over the amount sold in June 2020. The total of all Organic Fat Reduced Milk at retail for June 2021 was 124 million pounds which is 8.1% less than June 2020. In total, there was a drop of 3.7% in sales of retail organic milk in June 2021 as compared with June 2020.

Federal Milk Market Order 1(FMMO-1), in New England, reports utilization of types of organic milk and cream by pool plants. In July 2021, Class 1 utilization of organic whole milk totaled 11.6 million pounds, declining from 13.3 million pounds the previous year. The utilization of organic reduced fat milk in July this year, 14.0 million pounds, increased from 13.4 million pounds a year earlier. Year-to-date, there has been an increase of 17.4 million pounds of organic milk utilized as retail packaged product in the FMMO-1 from January to July 2021 as compared to January to July 2020.

The August 2021 USDA AMS in-store retail surveys of selected supermarkets in twenty-nine U.S. cities show the retail prices of organic whole milk, half gallon containers. Prices range from $3.15 in Indianapolis, IN, to $5.99 in Pittsburgh, PA. The simple average price for August 2021 is $4.15, up 3 cents from last month. The difference between the half gallon conventional milk price, $2.64, and the half gallon organic milk price, $4.17, is an organic premium of $1.53. The price spread between organic and conventional milk, half gallon package, declined $0.45 from the last retail survey.

October 2021 will see the annual meetings for Maple Hill producers and hopefully will confirm the pay price moving forward. Producers believe their pay price will be cut by as much as $2 per hundred pounds. Producers are expecting some clarity about how many dairies will lose their contracts at the end of the year as there are reports that sales have increased in 2021.

CROPP Cooperative reports that their Grass Fed sales are increasing which holds out some hope that they may be able to take on some of the Maple Hill producers. CROPP Cooperative remains committed to working with all the dairies that lost their contract with Danone but cannot provide any guarantee that they will be able to join the cooperative. CROPP producers are still in a situation of a supply management quota and any actions to support non-members will have to take into account the effect on other cooperative member-owners.

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