By Ed Maltby, NODPA Executive Director
The Agricultural Marketing Service (AMS) reports of estimated organic fluid product sales nationally for May and June 2023 show a level market but an increase in Class 1 utilization in the northeast. Sales of organic fluid milk products in May 2023 were 238 million pounds, down 2 percent from May 2022, and in June 2023 they were 224 million pounds, down 4.5 per cent from April 2022. In May 2023, fluid organic whole milk sales of 115 million pounds were up 0.9 percent compared to a year earlier. Reduced fat milk (2%) sales were 122 million pounds, down 4.0 percent from the previous year. June 2023 organic whole milk fluid sales were 112 million pounds, up 2.9 percent from June 2022. The organic reduced-fat milk fluid sales in June 2023 were 111 million pounds, down 10.5 percent from June 2022. The average retail price for organic milk in this second quarter for 2023 was $4.82 per half gallon, and in the same period in 2022 it was $4.54 per half gallon.
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
||
|
|
May-23 |
2023 Year to date |
May-22 |
Year to date |
|
Million pounds |
Percent |
|||
|
Organic Whole Milk |
115 |
579 |
0.9% |
3.1% |
|
Flavored Whole milk |
1 |
4 |
-69.9% |
-58.3% |
|
Organic Reduced Fat Milk (2%) |
80 |
387 |
-0.3% |
-4.4% |
|
Organic Low-Fat Milk (1%) |
24 |
118 |
-8.0% |
-5.8% |
|
Organic Fat Free Milk Skim |
12 |
65 |
-19.1% |
-11.4% |
|
Organic Flavored Fat-Reduced Milk |
7 |
34 |
-0.8% |
5.6% |
|
Other Fluid Organic Milk Products |
0 |
1 |
267.4% |
216.0% |
|
Total Fat Reduced Milk |
122 |
605 |
-4.0% |
-5.0% |
|
Total Organic Milk Products |
238 |
1189 |
-2.2% |
-1.6% |
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
||
|
|
Jun-23 |
2023 Year to date |
Jun-22 |
Year to date |
|
|
Million pounds |
Percent |
||
|
Organic Whole Milk |
112 |
691 |
2.90% |
3.0% |
|
Flavored Whole milk |
1 |
4 |
-66.10% |
-59.40% |
|
Organic Reduced Fat Milk (2%) |
72 |
459 |
-7.40% |
-4.9% |
|
Organic Low-Fat Milk (1%) |
22 |
141 |
-11.10% |
-6.7% |
|
Organic Fat Free Milk Skim |
11 |
76 |
-16.30% |
-12.2% |
|
Organic Flavored Fat-Reduced Milk |
5 |
39 |
-31.50% |
-1.2% |
|
Other Fluid Organic Milk Products |
1 |
2 |
402% |
255.0% |
|
Total Fat Reduced Milk |
111 |
716 |
-10.50% |
-5.9% |
|
Total Organic Milk Products |
224 |
1413 |
-4.50% |
-2.00% |
The report from retail surveys of selected supermarkets in 30 US cities by USDA shows that the retail prices of a half-gallon of organic Whole Milk and Fat Reduced milks was $4.85 in June and $4.86 in July 2023. The prices ranged from a low of $3.99 in multiple cities to a consistent high of $6.59 in St. Louis, MO. The simple average price for the year-to-date 2023 was $4.81, compared to an average in 2022 of $4.58, an average for 2021 of $4.13 and an average of $4.07 in 2019. Regionally in the northeast, packaged milk was on sale below the USDA data price between $3.70 and $3.99 per half gallon.
Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. It’s important to know that we do not know how much organic milk is being sold at retail that comes from outside the order which is therefore not subject to Class 1 deduction. This is categorized in the reports as Class I out of Marketing Area, but not separated by organic or conventional. While the total milk utilized in the area is accurate, the organic is probably underreported as it would not include milk from other FMMO’s. During June 2023, fluid organic whole milk utilization totaled 17.62 million pounds, up from 15.34 million pounds the previous year. The utilization of fluid organic reduced fat milk, 16.97 million pounds, increased from 16.19 million pounds a year ago. In July 2023, the fluid whole milk utilization totaled 16.23 million pounds, an increase from 14.42 million pounds from July 2022. For fluid organic reduced fat milk, the 14.52 million pounds in fluid utilization in July 2023 was a decrease from the 15.02 million in May 2022. Year-to-date, January to July 2023 compared with 2022, shows 2023 at 239.4 million pounds and 2022 at 219.04 million pounds, an increase of approximately 9% year over year. Organic fluid milk utilization is approximately 5.5% of the total fluid milk utilization within FMMO 1 for July 2023, not including the packaged Class1 milk coming into the area. Approximately 20% of Class 1 milk utilized in FMMO is from packaged milk outside the area.
|
UTILIZATION OF ORGANIC FLUID MILK PRODUCTS AND CREAM BY POOL PLANTS (Million pounds) IN FMMO 1 (not including organic milk from outside FMMO 1) |
||||||
|
|
Fluid retail Organic Milk 2023 |
Fluid retail Organic Milk 2022 |
Fluid retail Organic Milk 2021 |
Fluid retail Organic Milk 2020 |
Increase/Decrease of 2023 over 2022 |
Increase/Decrease of 2022 over 2021 |
|
JANUARY |
37.00 |
29.14 |
31.32 |
23.93 |
26.97% |
-7% |
|
FEBRUARY |
31.65 |
33.65 |
31.56 |
26.69 |
-5.94% |
7% |
|
MARCH |
37.37 |
31.56 |
31.87 |
27.90 |
18.41% |
-1% |
|
APRIL |
31.51 |
33.23 |
28.97 |
29.35 |
-5.18% |
15% |
|
MAY |
36.24 |
30.49 |
29.72 |
28.25 |
18.86% |
3% |
|
JUNE |
34.59 |
31.53 |
28.41 |
26.90 |
9.71% |
11% |
|
JULY |
30.75 |
29.44 |
25.50 |
26.70 |
4.45% |
15% |
|
AUGUST |
0.00 |
32.12 |
27.18 |
24.70 |
0 |
18% |
|
SEPTEMBER |
0.00 |
35.00 |
30.26 |
29.70 |
-100.00% |
16% |
|
OCTOBER |
0.00 |
34.83 |
29.47 |
25.78 |
-100.00% |
18% |
|
NOVEMBER |
0.00 |
31.13 |
31.07 |
24.47 |
-100.00% |
0.18% |
|
DECEMBER |
0.00 |
33.78 |
31.36 |
28.13 |
-100.00% |
8% |
|
ANNUAL |
|
385.90 |
356.68 |
322.50 |
|
8% |
Average Daily Dispositions By Pool Plants in FMMO 32 for July 2023
|
Percent Of |
July 2023 |
% Change |
July 2022 |
||||||
|
|
Total Class I |
Inside |
Outside |
Prev. Year |
Inside |
Outside |
|||
|
Product Sales On Routes |
Area |
Area |
Area |
(Daily Basis) |
Area |
Area |
|||
|
Whole Milk |
28.40 |
2,294,130 |
570,259 |
-0.81 |
2,249,650 |
638,119 |
|||
|
Reduced Fat Milk |
33.68 |
2,641,391 |
756,204 |
-5.25 |
2,735,879 |
850,157 |
|||
|
Low-fat Milk |
8.90 |
748,948 |
149,226 |
-5.08 |
754,019 |
192,236 |
|||
|
Skim/Nonfat/Fat Free Milk |
5.74 |
464,546 |
114,367 |
-12.54 |
519,988 |
141,905 |
|||
|
Buttermilk |
0.98 |
80,907 |
17,523 |
-7.99 |
85,990 |
20,991 |
|||
|
Flavored Milk & Milk Drinks |
6.81 |
497,085 |
189,368 |
-1.16 |
484,875 |
209,668 |
|||
|
Organic Whole Milk |
7.56 |
92,045 |
670,711 |
-4.33 |
98,846 |
698,465 |
|||
|
Organic Low-fat Milk |
7.93 |
91,725 708,275 |
-0.59 |
95,616 709,138 |
|||||
|
Sub Total |
100.00 |
6,910,777 |
3,175,933 |
-3.80 |
7,024,863 |
3,460,679 |
|||
|
Percent Of Total Route Dispositions |
|
68.51% |
31.49% |
|
67.00% |
33.00% |
|||
Every day there seems to be a report on another weather event that is both disruptive in its intensity but sometimes beneficial in providing much needed rain. Reports are that in the South-Central region, temperatures are having a huge impact on organic dairy cattle’s heat stress levels, leading to daily drops in organic milk production and breeding challenges. USDA AMS sources report that, on a herd-to-herd basis, days in milk are running above normal and culling cows are lower than normal, as operators hold onto cows to maintain the milk supply level. Meanwhile, some processors are requesting additional loads, above their contracted organic milk deliveries but producers are still facing uncertainty around high input prices.
In recent reports from a NOFA-New York certified livestock auction in New York, organic cull cows traded slightly higher than conventional cows in July and August. The average price for the conventional cull cows was $87 per hundredweight in August, compared to an average price of $92 per hundredweight for organic cull cows. The average price for conventional cull cows in July 2023 was $85 per hundredweight, compared to an average of $100 per hundredweight for organic cull cows. A report from a Midwest certified (certified by MOSA) livestock auction noted organic cull cows traded somewhat higher than conventional cull cows. The average price for organic ‘High Yielding Cows’ was $120-164 per hundred weight and organic ‘Low Yielding Cows’ was $119 per hundredweight and lower, compared to the average price of $85-104 per hundredweight for most conventional ‘Market Cows.’
June’s DMC income over feed cost calculation set a record low at just $3.65/cwt. Milk covered at the $9.50 level will realize an indemnity payment of $4,366.09 for each million pounds enrolled. This is down $1.18/cwt from May’s previous record low.
For conventional prices, premium alfalfa hay fell $7 per ton to $310, and corn slipped $0.05 per bushel to $6.49. Soybean meal dropped $10.12 per ton to $413.46, making feed costs $14.25/cwt, down $0.22. The All-Milk Price for June 2023 was $17.90/cwt. The projections for July are for an equally high payout with an All Milk price at $17.40/cwt. Premium alfalfa is at $288 per ton; soybean meal at $443.15 per ton and corn at $6.22 per bushel. Estimated feed costs are $13.88/cwt. This leaves an income minus feed cost at a low of $3.52/cwt. The DMC margin triggers Tier I indemnity payments at all coverage levels, from the catastrophic price floor of $4 per cwt to the maximum coverage level of $9.50 per cwt. The top payment is $5.98 per cwt at the maximum $9.50 coverage level. Outside of feed, the July index of prices paid for commodities and services, interest, taxes and farm wages was up 0.1% from June and unchanged from July 2022.
Machinery costs were up 0.1% from June and were up 3.2% from July a year ago. The July fuel cost index was up 2.7% from the previous month but 29% less than a year earlier. A positive in the USDA Ag Prices report: U.S. average prices received for cull cows (beef and dairy, combined) in July averaged $111 per cwt, up $4 from June and the highest monthly average since July 2015
On July 21st the U.S. Department of Agriculture (USDA) responded to pressure from producer groups to extend the deadline for the new Organic Dairy Marketing Assistance Program (ODMAP) to August 11, 2023. This extension gave organic dairy producers more than two additional weeks to apply for the program. At that time, USDA FSA reported that slightly over 1,000 applications had been received and $13.5 million of the $104 million had been distributed. At the time of writing (9/3/2023) there has been no decision announced as to further payments of either the extra 25% to bring the total paid up to the full amount of $1.10 that USDA calculated was the marketing cost of organic milk or an increased amount that will come closer to the amount spent by organic dairy on marketing expenses. The largest buyer of organic milk has preferred not to disclose how much they calculate the cost of shipping milk and other marketing deductions. Organic dairy producer groups and representatives of the organic milk buyers and processors have sent a letter to the Secretary of Agriculture asking for the rapid payment of the increased amounts directly to those that have already applied (see letter on page ???). While the amount of applications may seem low, there are factors that differentiate the use of federal funds by organic farm from conventional farms. The number of Anabaptist farms (modern groups within the Anabaptist movement are the Amish, Mennonites, and Hutterites), can be estimated at approximately 45% of total organic dairies (CROPP cooperative estimate more than 40% of their farms come in this category so this may be an underestimation). The majority of these farms do not apply for federal support. Data from the USDA Organic Survey of 2021showed there were 2,525 organic dairy farms of which only 2023 reported any dollar sales of milk. Did the Amish and Mennonites fill out the survey data from 2021? Knowing that there has been a loss of organic dairies in the last few years, it is a reasonable assumption that the number of non-Anabaptist organic dairies is no more than 1,500 which would have a response rate of 66%. This rate is very acceptable for a new program administered through an agency that organic dairies are not used to working with.
When looking at the cost and availability of feed we need to look at what influences these decisions. The world situation is an obvious influencer, as are the other domestic livestock and poultry operations that compete for organic feed. Mercaris reports that since the invasion of Ukraine in February 2022 through July of 2023, the United States has received 27,000 MT of organic soybeans from Ukraine. This accounts for about 6% of the organic soybeans imported over that period. The last shipment of Ukrainian organic soybeans arrived in February 2023. Stronger-than-expected exports from other regions during recent months have been able to offset this loss of supply. Turkey has been the sole source of organic cracked corn imports into the United States for the last two marketing years, but much of the raw corn was brought in from Ukraine and Russia. Organic whole and cracked corn imports fell to 20,000 MT in July, down 38% y/y. Organic cracked corn imports were up just 7% m/m, which did not make up for the decline in organic whole corn. In total, imports in July brought the marketing year-to-date import levels to 302,000 MT, down 3% y/y. Organic Soybean Imports in June are estimated at just 1,400 MT, which is down 97% y/y. All of these imports were sourced from Canada. Organic imports through July of the 2022/23 MY are estimated at 238,000 MT, which is down 7% y/y. Organic Soybean Meal Maritime Imports in July totaled 27,000 MT, which is up 34% from the prior month and 5% from the prior year. Turkey sent 16,000 MT of organic soybean meal in July, and Africa was also a significant source, with 7,000 MT from Ethiopia and 2,300 MT from Togo, plus small volumes coming from Djibouti, Ghana, Nigeria and India. Total organic soybean meal imports through July of the 2022/23 MY were 209,000 MT, which is 9% below the prior MY.
Mercaris reports that organic broilers’ slaughter remained lower over July, and also declined compared to the prior year, down 1%, with U.S. organic poultry slaughter projected to reach 54.2 million head, up 1% y/y. Organic layer numbers are expected to be approximately the same as last year despite loss of inventory at the start of the year.
Organic feed corn delivered prices averaged $9.64/bu. in August, down $3.00/bu. from 12 months prior. Organic feed soybean delivered prices averaged $22.16/bu. in August 2023, down $15.79/bu. from 12 months prior. There is no national data on soybean meal.
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