Pay and Feed Prices, May/June 2022

By Ed Maltby, NODPA Executive Director

In reports from USDA Agricultural Marketing Service in February and March 2022, national estimated sales of both conventional and organic milk fell in comparison to the same period in 2021, by three and four percent respectively. Sales of organic Whole Milk and organic Fat Free, in February 2022, saw an increase over February 2021 with sales of 104 million pounds for organic Whole Milk, an increase of 1.4%, and sales of 16 million pounds of organic Fat Free, an increase of 2.6% over 2021. One of the reasons for this drop in sales may be the increased average cost per half gallon at retail as reported by USDA AMS of 5% increase in February and 7.5% increase in March 2022 as compared to February and March 2021. Interestingly, this did not affect the increase in sales of organic Whole Milk or Fat Free in February 2022.

Estimated Total Sales of Fluid Milk Products for February and March 2022

Product Name	Sales of Organic Fluid Milk		Change from
Product Name	Feb-22	2022 Year to date	Feb-21	Year to date
	Million pounds		Percent
Organic Whole Milk	104	217	1.4%	-0.7
Flavored Whole milk	2	3	-4.6%	18.8
Organic Reduced Fat Milk (2%)	75	158	-6.7%	-7.5
Organic Low Fat Milk (1%)	24	51	-15.9%	-11.8
Organic Fat Free Milk Skim	16	30	2.6%	-3.6
Organic Flavored Fat-Reduced Milk	5	12	-18.3%	-13.8
Other Fluid Organic Milk Products	0	0	0.0%	0
Total Fat Reduced Milk	119	251	-8.1%	-8.2
Total Organic Milk Products	225	471	-3.9	-4.7

Product Name	Sales of Organic Fluid Milk		Change from
	Mar-22	2022 Year to date	Mar-22	Year to date
	Million pounds		Percent
Organic Whole Milk	116	333	-1.2	-0.8%
Flavored Whole milk	2	5	2.6	12.10%
Organic Reduced Fat Milk (2%)	87	246	-2.2	-5.7%
Organic Low Fat Milk (1%)	25	76	-13.6	-12.4%
Organic Fat Free Milk Skim	15	46	-7.9	-5.0%
Organic Flavored Fat-Reduced Milk	7	18	-29.3	-20.2%
Other Fluid Organic Milk Products	0	0	0	0.0%
Total Fat Reduced Milk	134	385	-6.9	-7.8%
Total Organic Milk Products	253	724	-4.3	-4.6

In the Northeast, the utilization of organic milk in February 2022 was 7 percent above February 2021, and in March 2022, the utilization of organic milk was 1% below March 2021. The utilization of organic milk in the first quarter 2022 was higher than 2020 which was before the shut down due to COVID restrictions. As we have written before, it’s increasingly difficult to estimate the real utilization of organic milk as there is no reporting on organic milk that goes into Stonyfield/Lactalis yogurt and manufacturing. There is still no reporting of the breakdown of organic milk that comes from outside the Federal Order, which would be significant information for producers in the Northeast.

Utilization of Organic Fluid Milk Products and Cream by Northeast Pool Plants (Million Pounds)

	Fluid retail Organic Milk 2022	Fluid retail Organic Milk 2021	Fluid retail Organic Milk 2020	Increase/Decrease of 2022 over 2021	Increase/Decrease of 2021 over 2020
January	29.14	31.32	23.93	-7%	31%
February	33.65	31.56	26.69	7%	18%
March	31.56	31.87	27.90	-1%	14%
April		28.97	29.35		-1%
May		29.72	28.25		5%
June		28.41	26.90		6%
July		25.50	26.70		-4%
August		27.18	24.70		10%
September		30.26	29.70		2%
October		29.47	25.78		14%
November		31.07	24.47		27%
December		31.36	28.13		11%
Annual	94.35	356.68	322.50		11%

In the last issue of the NODPA News, we published an in-depth breakdown of the Final Rule on the Origin of Livestock Rule (OOL). It was based on an advance copy of the regulation before it was published on the National registry. Below is a list of key points as compiled by Christie Badger from a webcast by the USDA:

One-Time Transition:

New operations or operations converting to organic may:
- Purchase or raise organic animals, or
- Transition nonorganic animals to organic production ONCE.
Once an operation is certified, all animals must be organically managed from the last third of pregnancy.

OOL: Transfer of Transitioned Animals:

Once certification is complete:
- An operation may only source animals that have been under continuous organic management since the last third of pregnancy.
- An operation cannot source (purchase, sell, or transfer) transitioned animals from another operation.*

*Some small businesses may be granted limited exceptions by the AMS Administrator.

OOL: Sourcing Exception for Small Businesses:

Some small businesses may be granted limited exceptions by the AMS Administrator when:
- The certified operation selling the transitioned animals is part of a bankruptcy proceeding or a forced sale; or
- The certified operation has become insolvent, must liquidate its animals, and as a result has initiated a formal process to cease its operations; or
- The certified operation wishes to conduct an intergenerational transfer of transitioned animals to an immediate family member.

*Requests for an exception must be submitted to an operation’s certifying agent and approved by the USDA’s Agricultural Marketing Service.

Implementation & Enforcement:

All certified organic dairy operations must comply with the OOL rule by April 5, 2023,
Certified operations that began transitioning livestock before April 5, 2022, may complete these transitions. All transitions must be complete by April 5, 2023.
Certified operations may source transitioned animals for one year until April 5, 2023.
Certified operations may not source transitioned animals after April 5, 2023.

NOP Enforcement of OOL:

NOP will review certifiers’ systems of oversight and enforcement for updates that reflect OOL’s new requirements, such as updated Organic System Plan (OSP) templates and inspection reports.
The NOP surveillance team will begin auditing certifiers and operations for compliance with the rule.
NOP will provide training for certifying agents and producers via the Organic Integrity Learning Center (OILC).

Unfortunately, the corn and soy prices remain high with no projections for any changes. War and weather combine together to make it very difficult to project any changes in the cost of purchased feed. The article on the costs of production, in this NODPA News, highlights how producers are being squeezed from all ends.

We have been listing a number of sales of organic dairy animals on the NODPA website. As an indication of any small premium for organic cull cows, at the auction in New Berlin, N.Y. on April 11, 2022, Organic Cull Cows were sold at 93¢ - 99¢ per hundred wt., and Grassfed Organic Culls sold at 90¢ - 92¢, as against an average of 82¢ - 88¢ per cwt for conventional culls.

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