Please Patronize our Advertisers
By Ed Maltby, NODPA Executive Director
Beginning of a new year, hopefully not like the last one. Those producers that are reading this have, undoubtedly had a bad year. Whether it was disastrous or not could well depend on the length of time you have been in organic dairy, your debt service and the size of the operation. Some dairies will not be producing organic milk in 2023, either deciding to retire from the daily, unprofitable work or returning to conventional dairy where costs are lower and risk management better, or on the advice or lender and family, selling their cows and/or land.
Natural attrition from age or family reasons is expected but the anticipated level of organic dairy farms leaving in 2022 and 2023 will be higher than usual across the country. Some estimate 25% and others, even higher.
Why is this possible with such a high retail price? Milk buyers have a variety of reasons all very relevant to their business model. For example:
Finally, I will add two more:
I hope everyone is signed up for the Dairy Margin Coverage since they project payments in 2023. The Pandemic Assistance Revenue Program (PARP) is dependent on loss of gross revenue not net income, which does not fit the situation for organic dairy. The Farm Service Agency (FSA) is accepting applications for PARP from Jan. 23, 2023 to June 2, 2023 for the years 2020 and 2021. I do not expect that FSA will be able to find a relevant program for organic dairy quickly, so do not anticipate any emergency payments soon. A full safety net organic dairy program will have to come through legislation, probably the Farm Bill, which won’t become law until the end of 2023 and be available sometime in 2024.
Posted: to Industry News on Thu, Jan 26, 2023
Updated: Sat, Jan 28, 2023