By Ed Maltby, NODPA Executive Director
The USDA Agricultural Marketing Service (AMS) has published estimated organic fluid product sales nationally, for March and April 2024. They show a continued increase in the sales of Whole Milk packaged fluid products of 12% percent over March 2023, with a 9.9% reduction in Reduced-Fat Milk over the same period. In April 2024, sales of organic Whole Milk continue to increase year over year by18.1% over April 2023 and sales of organic Reduced Fat milk increased by 10.7% over April 2023.
Total US sales of organic fluid milk products were 257 million pounds in March 2024, with Whole Milk sales at 137 million pounds, and sales of Reduced-Fat Milk at 119 million pounds. In April 2024, total sales of organic packaged milk were 251 million pounds, with sales of organic packaged Whole Milk at 130 million pounds, and sales of organic Reduce-Fat Milk at 119 million pounds. The continued increase in sales of organic whole milk reflects the general industry trend within all of dairy for consumers’ preference for whole milk but organic milk stands out as increasing fluid milk sales where conventional milk is losing fluid sales and increasing butter and cheese sales.
The average retail price for organic milk has ranged from $3.81 per half gallon in 2008 to $4.88 per half gallon for 2023. In May and June of 2024, the average retail price was $4.81 and 4.82 respectively. In June 2024, the highest retail price was in Pittsburgh PA at $6.59 per ½ gallon, and the lowest in 8 separate cities was $3.99 per ½ gallon. The increase in sales despite increase in retail price, indicates that demand by consumers for organic dairy is inelastic. The retail prices were collected by the FMMO based on a survey conducted between the 1st and 10th of each month in selected cities or metropolitan areas. The largest and second largest food store chains are surveyed.
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
|||
|
|
Mar-24 |
2024 Year to date |
Mar-23 |
Year to date |
|
|
Million pounds |
Percent |
|
|||
|
Organic Whole Milk |
137 |
392 |
12.0% |
11.1% |
|
|
Flavored Whole milk |
1 |
2 |
-34.6% |
-12.7% |
|
|
Organic Reduced-Fat Milk (2%) |
81 |
238 |
-2.6% |
-0.1% |
|
|
Organic Low-Fat Milk (1%) |
21 |
66 |
-18.9% |
-11.0% |
|
|
Organic Fat-Free Milk Skim |
11 |
34 |
-22.1% |
-15.6% |
|
|
Organic Flavored Fat-Reduced Milk |
5 |
16 |
-34.0% |
-27.4% |
|
|
Other Fluid Organic Milk Products |
0 |
1 |
222.0% |
80.4% |
|
|
Total Fat Reduced Milk |
119 |
355 |
-9.9% |
-5.5% |
|
|
Total Organic Milk Products |
257 |
750 |
0.5% |
2.5% |
|
|
|
|||||
|
Product Name |
Sales of Organic Fluid Milk |
Change from |
|||
|
|
Apr-24 |
2024 Year to date |
Apr-23 |
Year to date |
|
|
|
Million pounds |
Percent |
|||
|
Organic Whole Milk |
130 |
522 |
18.1% |
12.7% |
|
|
Flavored Whole milk |
1 |
3 |
110.0% |
7.9% |
|
|
Organic Reduced-Fat Milk (2%) |
78 |
316 |
13.4% |
3.0% |
|
|
Organic Low-Fat Milk (1%) |
19 |
86 |
-3.5% |
-9.4% |
|
|
Organic Fat-Free Milk Skim |
11 |
46 |
-13.0% |
-15.0% |
|
|
Organic Flavored Fat-Reduced Milk |
10 |
26 |
83.3% |
-4.9% |
|
|
Other Fluid Organic Milk Products |
0 |
1 |
-40.5% |
36.1% |
|
|
Total Fat Reduced Milk |
119 |
474 |
10.7% |
-1.9% |
|
|
Total Organic Milk Products |
251 |
1,001 |
14.60% |
5.3% |
|
Data may not add due to rounding to the nearest million pounds
Federal Milk Market Order 1, in the Northeast, reports utilization of types of organic milk by pool plants for products packaged in the FMMO 1. Data on milk in the other classes are not published separated by production practice, neither is milk that comes into the order already packaged to be sold in the order. According to FMMO 1 the data is “Derived from reports submitted by pooled handlers.” A Pool Handler is defined as “any person who operates one or more pool plants, or an association of milk producers which is incorporated as a cooperative association, and which has been approved by the bureau for the marketing of milk produced by pool producers.” FMMO 1 reported that in April 2024, fluid organic Whole Milk utilization totaled 19.53 million pounds, higher than the previous year of 16.597 million pounds. In April 2024, the utilization of fluid organic Reduced Fat milk, 16.147 million pounds, increased from 14.921 million pounds in April 2023. In May 2024 organic Whole Milk utilization was 21.434 million pounds, an increase on May 2023 which was 18.581 million pounds. In May 2024 organic Reduced Fat utilization was 17.512 million pounds, approximately the same as May 2023 which was 17.663 million pounds. In April 2024, there was 135.939 million pounds of milk marketed as Class 1 in FMMO 1 from outside the FMMO 1 marketing area, and in May 2024 there was 135.493 million pounds, approximately 19% of total Class 1 utilization in the Order.
|
UTILIZATION OF ORGANIC FLUID MILK PRODUCTS AND CREAM BY POOL PLANTS (Million pounds) in FMMO 1 (Northeast) not including packaged out of order |
|||||
|
Month |
Fluid retail Organic Milk 2024 |
Fluid retail Organic Milk 2023 |
Fluid retail Organic Milk 2022 |
Fluid retail Organic Milk 2021 |
Fluid retail Organic Milk 2020 |
|
JANUARY |
34.93 |
37.00 |
29.14 |
31.32 |
23.93 |
|
FEBRUARY |
31.50 |
31.65 |
33.65 |
31.56 |
26.69 |
|
MARCH |
34.82 |
37.37 |
31.56 |
31.87 |
27.90 |
|
APRIL |
35.68 |
31.51 |
33.23 |
28.97 |
29.35 |
|
MAY |
38.95 |
36.24 |
30.49 |
29.72 |
28.25 |
|
JUNE |
34.59 |
31.53 |
28.41 |
26.90 |
|
|
JULY |
30.75 |
29.44 |
25.50 |
26.70 |
|
|
AUGUST |
33.75 |
32.12 |
27.18 |
24.70 |
|
|
SEPTEMBER |
28.32 |
35.00 |
30.26 |
29.70 |
|
|
OCTOBER |
33.54 |
34.83 |
29.47 |
25.78 |
|
|
NOVEMBER |
31.19 |
31.13 |
31.07 |
24.47 |
|
|
DECEMBER |
33.56 |
33.78 |
31.36 |
28.13 |
|
|
ANNUAL |
399.47 |
385.90 |
356.68 |
322.50 |
|
Central Federal Order (FO) 32, Mideast FO 33 and California FO 51 also publish reports of the utilization of organic milk separately by month and year. The Upper Midwest, FO 30 does not report on fluid organic milk, I assume because only 5.8% of total utilization of fluid milk is Class1. FO 5, Appalachian, with an average of 7O% Class 1 utilization, has organic under “Restricted data due to less than 3 handlers. Data is included in the buttermilk packaged disposition.” FO 32 and FO 51 publish volumes of organic milk sales on routes inside the order and those sold in other orders. With the data currently published by five of the 11 Federal Milk Marketing Orders and the monthly data from the national monthly report, Estimated Fluid Milk Products Sales Report, we know that approximately 57% of fluid package organic milk comes from these five orders. The Southwest Federal Order 126 made up of Texas and New Mexico, which have the largest number of organic cows of any FO (according to 2021 census data), does not separate out their fluid packaging of organic milk from conventional milk in their published reports even though those numbers are reported to AMS to make up the national data. In May the highest volume of organic milk reported as Class 1 was in the Central FO 32, with 51.32 million pounds. Aurora’s two processing plants and 25,000 milking cows are located in this FO. The next highest published report on organic packaged sales is the Northeast FO 1 with 38.95 million pounds followed by California FO with 38.14 million pounds.
The chart below shows a consistent volume of organic packaged milk marketed out of Order FO 32. Sales of packaged organic fluid milk are increasing nationally. Handlers in the Central Federal Milk Marketing Order sold 523 million pounds of organic packaged milk outside of their order in 2023. We can only assume that retail buyers are using that ready-made supply to provide product for any increase in retail sales in their stores.
|
UTILIZATION OF ORGANIC FLUID MILK PRODUCTS AND CREAM BY POOL PLANTS (Million pounds) in FMMO 32 (Central) |
|||||||||
|
Month |
2024 |
2024 in order |
2024 out of order |
2023 |
2023 in order |
2023 out of order |
2022 |
2022 used in order |
2022 used out of order |
|
January |
56.23 |
6.41 |
49.82 |
55.21 |
6.51 |
43.63 |
|
|
|
|
February |
51.88 |
5.77 |
46.12 |
49.11 |
5.49 |
43.98 |
|
|
|
|
March |
53.96 |
5.93 |
46.29 |
52.73 |
5.59 |
45.35 |
|
|
|
|
April |
54.13 |
6.04 |
48.09 |
49.18 |
5.64 |
45.44 |
51.93 |
5.54 |
46.39 |
|
May |
51.32 |
5.81 |
45.51 |
48.21 |
5.40 |
42.78 |
51.13 |
5.84 |
45.29 |
|
June |
|
|
|
45.20 |
5.57 |
39.63 |
51.58 |
5.62 |
45.96 |
|
July |
|
|
|
48.45 |
5.70 |
43.64 |
49.67 |
6.04 |
43.64 |
|
August |
|
|
|
48.47 |
5.63 |
42.85 |
52.16 |
6.20 |
45.96 |
|
September |
|
|
|
48.75 |
5.58 |
43.18 |
51.04 |
6.31 |
44.73 |
|
October |
|
|
|
49.73 |
5.48 |
42.48 |
52.06 |
5.86 |
44.53 |
|
November |
|
|
|
49.60 |
5.48 |
42.48 |
52.31 |
5.96 |
46.35 |
|
December |
|
|
|
54.17 |
6.08 |
48.10 |
55.94 |
6.29 |
49.55 |
|
Annual Total |
|
|
|
598.81 |
68.14 |
523.53 |
|
|
|
In recent reports from a NOFA-NY-certified livestock auction in New Berlin, New York, organic cull cows traded, on average, above conventional cows in May and June 2024. The average price for conventional cull cows ranged from a low of $95/cwt to a high of $113 /cwt. The average price for organic cull cows ranged from a low of $105/cwt to a high of $125/cwt. Organic milking cows were selling well at an average of $1,386-$2,700 each in May and June 2024. USDA AMS reports that in a recent report from a Pacific Northwest livestock auction, the top 10 organic cull cows traded higher than conventional cull cows, and the overall average for organic cull cow prices traded higher than the overall average for conventional cull cows in May 2024. The average price for the top 10 organic cows auctioned was $183.81 per hundredweight, compared to an average price of $146.37 per hundredweight for auctioned top 10 conventional cows. The average weight for the top 10 conventional cows was 1502.0 pounds compared to 1620.5 pounds for the top 10 organic cows. The overall price for organic cows auctioned was $143.34 per hundredweight with an average weight of 1240.1 pounds, while the overall price for conventional cows auctioned was $121.28 per hundredweight and had an average weight of 1345.0 pounds.
CROPP/Organic Valley producers report that they had their regional meetings attended by their CEO Jeff Frank. There were positive reports from the management team that the company had improved their financial position and that debt had been reduced from $80 million to $30 million. There was no indication that the pay price would be increased other than the annual increase already published of 50 cents per hundredweight. CROPP announced in their press release that it “has welcomed more than 50 new family farms into its fold in the first four months of 2024, and expects to bring in over 60 more by the end of the year.” Shawna Nelson, Organic Valley's executive vice president of membership is quoted as saying: “It fills us with excitement to bring these new farms into the fold of our cooperative, where we will join forces to further our cause and our dream of revolutionizing the food system," said. "Aligned with our roots of nourishing organic food, sustainable family farming and thriving communities, these farms are passionate about contributing to a movement that champions the interest of both farmers and consumers." The newest farms are from Pennsylvania, Wisconsin, New York, Indiana, Ohio, Missouri, and Iowa. Producers were informed that the cooperative was short on milk.
Vermont published their latest report that the number of organic dairy farms in the state was 118 in the first quarter of 2024 down from 203 in 2016 and 169 in 2020. Organic dairy farms in New England have only one option for selling to a national brand, CROPP Cooperative, with limited interest from buyers for regionally based Lactalis/Stonyfield and Upstate Niagara cooperative.
Maple Hill report that they continue to increase the signing of producers in Pennsylvania and New York with their unique incentive plan as they expand their supply in that region. They are also looking at how to share the cost of trucking more equably to lessen the cost to producers.
The USDA AMS issued a Recommended Decision on its website proposing to amend the uniform pricing formulas applicable in all 11 Federal milk marketing orders (FMMOs) on July 1st, 2024. Under the AMS recommendations, the minimum price for Class I milk would return to how it was calculated before the changes in 2018 and be based on the higher of the Class III or Class IV price plus the differential for Class I production. Besides the price of fluid milk, the AMS amendments would increase the amount of protein in Class III and IV milk; remove 500-pound barrel cheese prices from the formula for the monthly average cheese price; increase the estimated costs to processors for making cheese, butter, nonfat dry milk, and dry whey; and introduce location-specific Class I differentials to reflect current marketing conditions while retaining the base differential of $1.60 per 100 pounds of milk. This final point is of the most interest to organic dairy as the USDA refused to consider that the marketing of organic milk is different from the conventional market therefore should not have to pay into the Pool which determines the pay price conventional farmers receives. Organic milk buyers and processors use the argument that this payment into the Pool restricts what they can pay producers but there is no evidence that if organic was exempt from Class 1 payments into the Pool that the savings would go directly to producers. Also, CROPP/Organic Valley testimony had a chart that showed the utilization of organic milk within the different FMMO Classes, with only 55% within Class 1 utilization that would have to pay this ‘tax.’ The most interesting analysis of how the FMMO does not relate to the organic market is PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW SUBMITTED BY MILK INNOVATION GROUP date 4/1/2024 and submitted under the Post Hearings Briefs at https://www.ams.usda.gov/rules-regulations/moa/dairy/hearings/national-fmmo-pricing-hearing.
Of interest to organic also was the new approach to fluid products packaged by the Extended Shelf Live (ESL) processing which is used for most organic products. For milk packaged using ESL processing, the base Class I skim milk price will be the Class I mover plus an ESL adjustment. The ESL adjustment would be announced simultaneously with the Class I mover - on or before the 23rd of the prior month. The proposed ESL adjustment would be computed from the current month’s average of the advanced Class III and Class IV skim milk pricing factors (AO) plus the higher of the advanced Class III and Class IV skim milk pricing factors (HO) minus the AO for the average of each of the preceding months minus the current month’s HO which will equal the current months Class 1 Skin milk ESL adjustment. This may be either a positive or negative number. There are examples of how this will work on their website at https://www.ams.usda.gov/rules-regulations/moa/dairy/hearings/national-fmmo-pricing-hearing.
There was no Dairy Margin Coverage (DMC) Program Tier 1 payment in April and May 2024, with no payment forecast for the rest of the year. The All-Milk price for April 2024 was $20.50/cwt and $21.95/cwt in May; corn was at $4.36/bushel in April and $4.39/bushel in May; Alfalfa was at $260/ton in April and $224/ton in May with soymeal at $357/ton in April and $388 in May. The margin in April 2024 was $10.90 and in May $10.60.
There are no further updates on any next payment from the Organic Dairy Marketing Assistance Program (ODMAP) from the funds that were not used from the $105 million allocated to the program in January 2023. USDA FSA report that they have competing priorities which have delayed the launch of payments in 2024. The formulae that were used in 2023 payments was flawed in assessing marketing costs of the average organic dairy by using conventional data. The hope is to expand payments to organic dairies by increasing the volume of milk on which payments are made to 7 million pounds annually and the dollar amount per hundredweight to more accurately reflect the organic expense of marketing organic milk as a segregated product, especially on trucking fees.
The Foreign Agricultural Service (FAS) releases monthly export data which includes export volumes and values for organic milk categorized as HS-10 code 0401201000. Recently released data for April 2024 indicated organic milk exports were 136,395 liters (309,720 pounds), up 3.2 percent from the month prior, and up 37.5 percent from 2023. Exports of organic milk from the start of the year through April 2024 are up 12.8 percent, compared to the same period one year ago.
The September issue will have an article on the practicalities of when and how to use Meloxicam. There are questions around withdrawal time for both milk and beef if it is allowed for use in mature and lactating livestock when there are several days of treatment to account for the build up of residue in the animal. Another question will be on annotations about how widespread the drug can be used and on what species. The petition submitted is to add the treatment aid/agent Meloxicam to section 205.603 of the NOP’s National List of Allowed and Prohibited Substances (National List). It is currently under NOSB Review.
National data from USDA and Argus has organic feed corn delivered to the elevator averaging $8.09 per bushel on the East coast in July 2024, down approximately $3 /bu. from 12 months prior. Argus reports that some elevator and warehouses are thinking of selling domestic organic corn into the conventional market to create space for new crop because of the declining margin between organic and conventional corn which is now at $4.40/bushel Organic feed soybean delivered to the elevator averaged $19.26/bu. in July 2024, down approximately $3/bu. from 12 months prior. With the expected high volumes of organic soybeans from Argentina, estimated by Argus at 80,000 tons in 2024 (up from 20,000 tons in 2023) due to start arriving in the US in July, the market for organic soy is depressed. Soybean meal is currently trading at $862/ton, about $4.13/cwt. lower than 2023 and is in high demand, with the price projected by Argus to increase. These prices take no account for the cost of transport or dealer charges. Costs of organic Alfalfa are about the same as conventional at $225 per ton but there are limited reports on hay sales of new crop hay.
Attached Files:
Posted: to Organic Pay, Feed & Grain Prices on Sun, Jul 14, 2024
Updated: Sun, Jul 14, 2024
