By Ed Maltby, NODPA Executive Director
The Agricultural Marketing Service (AMS) reported that in September 2022, estimated fluid product sales of organic milk increased by 1.1% over September 2021, and an increase of 2% in October 2022 over October 2021, with a minus 0.9% for the year-to-date October 2022 over 2021. Organic whole milk sales, at 113 million pounds in September, and 116 million pounds in October, showed the greatest growth with a 3.1% growth year-to-date. Reduced fat milk sales were 124 million pounds in September, and 120 million pounds in October 2022, falling 4.1 percent from the previous year, year-to-date.
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
||
|
|
Sep-22 |
2022 Year to date |
Sep-21 |
Year to date |
|
|
Million pounds |
Percent |
||
|
Organic Whole Milk |
113 |
1007 |
6.4% |
2.7 |
|
Flavored Whole milk |
1 |
14 |
-68.1% |
0.1 |
|
Organic Reduced Fat Milk (2%) |
79 |
715 |
-1.5% |
-3.1 |
|
Organic Low Fat Milk (1%) |
24 |
222 |
-6.2% |
-8.2 |
|
Organic Fat Free Milk Skim |
13 |
127 |
-4.1% |
-6.9 |
|
Organic Flavored Fat-Reduced Milk |
8 |
64 |
7.6% |
-0.5 |
|
Other Fluid Organic Milk Products |
0 |
1 |
4.0% |
125.3 |
|
Total Fat Reduced Milk |
124 |
1128 |
-2.3% |
-4.4 |
|
Total Organic Milk Products |
238 |
2,149 |
1.1% |
-1.2 |
|
|
||||
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
||
|
|
Oct-22 |
2022 Year to date |
Oct-21 |
Year to date |
|
|
Million pounds |
Percent |
||
|
Organic Whole Milk |
116 |
1123 |
7.2 |
3.1% |
|
Flavored Whole milk |
1 |
14 |
-70.9 |
-8.00% |
|
Organic Reduced Fat Milk (2%) |
79 |
794 |
4.7 |
-2.4% |
|
Organic Low Fat Milk (1%) |
20 |
242 |
-18.5 |
-9.1% |
|
Organic Fat Free Milk Skim |
13 |
140 |
-11.2 |
-7.3% |
|
Organic Flavored Fat-Reduced Milk |
7 |
70 |
12.7 |
0.6% |
|
Other Fluid Organic Milk Products |
0 |
2 |
30.6 |
86.1% |
|
Total Fat Reduced Milk |
120 |
1248 |
-1.5 |
-4.1% |
|
Total Organic Milk Products |
237 |
2385 |
2 |
-0.9 |
November 2022 estimated fluid product sales were reported on January 12, 2023, with sale of total organic milk products at 230 million pounds, down 4.9 percent from November 2021, and down 1.2 percent year to-date. Organic whole milk sales, 111 million pounds, were down 1.9 percent compared to a year earlier, but up 2.7 percent year-to-date. Reduced Fat Milk (2%) sales were 76 million pounds, down 6.3 percent from the previous year and down 2.8 percent year-to-date. Organic flavored whole milk sales, 1 million pounds, decreased 72.6 percent from the previous year and decreased 15.4 percent year-to-date. Flavored fat-reduced organic milk has been holding steady at between 7-8 million pounds on a monthly basis but up from 27 per cent on November 2021.
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
||
|
|
Nov-22 |
2022 Year to date |
Nov 2021 |
Year to date |
|
|
Million pounds |
Percent |
||
|
Organic Whole Milk |
111 |
1,234 |
-1.9 |
2.7% |
|
Flavored Whole milk |
1 |
15 |
-72.6 |
-15.4% |
|
Organic Reduced Fat Milk (2%) |
76 |
870 |
-6.3 |
-2.8% |
|
Organic Low Fat Milk (1%) |
23 |
266 |
-11.7 |
-9.4% |
|
Organic Fat Free Milk Skim |
13 |
152 |
-11.2 |
-7.7% |
|
Organic Flavored Fat-Reduced Milk |
7 |
77 |
27.5 |
2.5% |
|
Other Fluid Organic Milk Products |
0 |
2 |
-14.3 |
47.5% |
|
Total Fat Reduced Milk |
119 |
1367 |
--6.6 |
-4.4% |
|
Total Organic Milk Products |
230 |
2,616 |
-4.9 |
-1.2 |
Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During October 2022, organic whole milk utilization totaled 18.09 million pounds, up from 13.08 million pounds the previous year. The utilization of organic reduced fat milk, 16.73 million pounds, increased from 15.66 million pounds a year ago. During November 2022, organic whole milk utilization totaled 15.31 million pounds, up from 14.32 million pounds the previous year. The utilization of organic reduced fat milk, 15.82 million pounds, decreased from 16.74 million pounds a year ago.
|
UTILIZATION OF ORGANIC FLUID MILK PRODUCTS AND CREAM BY 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 |
33.23 |
28.97 |
29.35 |
15% |
-1% |
|
MAY |
30.49 |
29.72 |
28.25 |
3% |
5% |
|
JUNE |
31.53 |
28.41 |
26.90 |
11% |
6% |
|
JULY |
29.44 |
25.50 |
26.70 |
15% |
-4% |
|
AUGUST |
32.12 |
27.18 |
24.70 |
18% |
10% |
|
SEPTEMBER |
35.00 |
30.26 |
29.70 |
16% |
2% |
|
OCTOBER |
34.83 |
29.47 |
25.78 |
18% |
14% |
|
NOVEMBER |
31.13 |
31.07 |
24.47 |
0.18% |
27% |
|
DECEMBER |
|
31.36 |
28.13 |
11% |
|
|
ANNUAL |
352.12 |
356.68 |
322.50 |
-1% |
11% |
Mercaris supplies data on the average pay price for organic milk over the spot price. There was not a significant amount of trading on the Spot Market in October but some in November 2022. Processors and buyers report that organic milk is short in the Northeast.
|
U.S. Organic Dairy Prices (U.S. Dollars per CWT) |
||
|
Date |
Spot Fluid Milk Price |
Fluid Milk Pay Price |
|
Mar-22 |
$ 33.21 |
$ 28.54 |
|
Apr-22 |
$ 32.72 |
$ 29.59 |
|
May-22 |
$ 33.88 |
$ 28.77 |
|
Jun-22 |
$ 35.88 |
$ 29.05 |
|
Jul-22 |
$ 35.88 |
$ 28.37 |
|
Aug-22 |
$ 37.05 |
$ 29.66 |
|
Sep-22 |
$ 37.05 |
$ 29.66 |
|
Oct-22 |
$ 36.08 |
$ 29.66 |
|
Nov-22 |
$ 36.08 |
$ 29.66 |
|
|
|
|
|
Data from Mercaris 12/18/2022 |
||
AMS reports organic milk retail prices for selected U.S. cities. The data is collected by the Federal Milk Market Order administrators based on a survey conducted one day between the 1st and 10th of each month (excluding Fridays and weekends) in selected cities or metropolitan areas. One outlet of the largest and second largest food store chains are surveyed. The price represents the most common brand in ½ gallon nonreturnable containers. The November 2022 in-store retail surveys showed the average retail price decreased to $4.74, and increased slightly to $4.77 in December 2022, with a yearly average of $4.58 for 2022. This was an increase of 35 cents per half gallon over the average for 2021, and 54 cents over the average for 2020. The 35 cents converts to $8.14 per cwt. and the 54 cents converts to $12.56 per cwt. Producers received approximately $1.50 increase in pay price over that same period. Milwaukee, WI had the highest average retail price for 2022 at $5.63 per half gallon, while Seattle, WA had the lowest average annual retail price of $3.62 per half gallon.
In a letter dated 12/22/2022, the CROPP Board sent a letter to Dairy Members informing them that there was a dairy pay price increase of 50 cents included in the 2023 budget, effective with January 2023 milk for both Grass Fed organic and organic. The pay price increase would be rolled equally into the butterfat and protein price at a rate of $0.0676/lb. on both components. The letter had a caution that “individual components may influence how this increase impacts your mailbox price.” There was also a caution that 25 cents/cwt of the increase would be paid for with an increase in sales and 25 cents/cwt would come from savings within the business. The COOP board can, and does, change the pay price at any time it feels that the financial circumstances of the company require it.
Jeff Frank has been named chief executive officer of Organic Valley, effective Jan. 23. He will succeed Bob Kirchoff, who is retiring from the cooperative on Jan. 31. Mr. Frank will join Organic Valley following a 25-year career at Hormel Foods, where he held various senior roles in product and brand management. In 2009, he took on the role of vice president of marketing at MegaMex Foods and was later promoted to president and CEO of MegaMex Foods. He received bachelor's degrees in business administration and Spanish from the University of Minnesota-Duluth, a master’s degree in business administration from the University of St. Thomas and an executive certificate from UCLA's Anderson School of Management. He also has completed the Executive Education program at Harvard Business School.
In a drive to get some dollars into organic dairy producers’ pockets as they face record losses for 2022 and no improvements for 2023, NODPA and many others have been advocating with Congress and USDA for targeted emergency payments plus some long-term improvements in a safety-net program. In the Omnibus budget package at the end of 2022, there was report language that told USDA that Congress wanted a report on their progress in providing resources to supply financial assistance, increased data, and enforcement of regulations by January 23, 2023. Some extracts from the report language: “The agreement (Bill) is concerned with the dramatic rise in organic feedstock prices for livestock, especially organic dairy producers, as a result of severe drought conditions, international trade wars, supply chain backlogs, and unprecedented inflation. The Committees are working closely with the department to better understand this issue and find a solution. The agreement directs the department to report back to the Committees within 30 days of enactment of this Act on available funding sources to address this problem, including exercising authority under the Commodity Credit Corporation. The Secretary is directed to include 2022 losses in the Pandemic Assistance Revenue Program.” And “The agreement recognizes the need for organic dairy producers to have detailed data about market conditions in order to make decisions about the value of their products. Within 60 days of enactment of this Act, AMS is directed to brief the Committees on the feasibility of collection and publication of organic fluid milk data from all Federal Milk Marketing Orders.” And “The agreement directs AMS to continue strong enforcement of organic dairy production standards and to resolve significant variations in standards interpretation that exist among organic certifiers and organic dairy producers. AMS shall continue to conduct critical risk-based oversight, particularly for large, complex dairy operations.”
We have met with USDA to urge them to work as quickly as possible but on 1/11/2023, Zach Ducheneaux, administrator of the Farm Service Agency, told Agri-Pulse that USDA needs to finish allocating disaster assistance for 2020 and 2021 before it starts offering payments for 2022 losses. He told Agri-Pulse, “We will do our level best to get it out the door as efficiently and equitably as possible.” The fiscal 2023 omnibus funding package included $3.7 billion to cover 2022 losses. He indicated that the department was likely to use the same Emergency Relief Program framework that USDA created for the 2020 and 2021 payments. “When we were contemplating ERP, we were thinking of a process that we could continue to put assistance through,” he said. This process is based on emergency payments decided by any loss of gross income rather than losses on net income. While this may reflect the inability to produce products and challenges marketing them during weather related crises, it does not reflect the extraordinary increases in production costs that producers have seen in 2022 tied to the world economy, inflation, and supply chain problems due to COVID. For organic dairy, gross income has remained consistently low while production costs have spiraled out of control.
Mercaris reports that organic whole and cracked corn had stabilized in January 2023 at $11.31 per bushel. Imports bounced back in November 2022, reaching 21,700 MT, which was up 38% from October 2022. Organic whole corn imports reached 15,000 MT in October 2022, with 10,600 MT coming from Argentina and the rest from Canada.
Organic soybeans in January 2023 were priced at $30.81 per bushel and imports continued steady in November 2022, reaching 20,400 MT, a decrease of 1% y/y and 18% from October 2022. While organic soybean imports are slowing down a little, they remained relatively strong through the end the year despite prices beginning to drop. Over half of these imports came from Argentina (11,300 MT) with the second highest coming from Togo (4,000 MT).
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