By Ed Maltby, NODPA Executive Director
There is continued movement of producers to different buyers, mostly under Grass Fed organic certification but also those that do not have the add-on certification. Transparency on Pay Price and market conditions from the milk buyer serves the farmers and the organic dairy market far better than rumors spread from farmer to farmer or by the milk truck drivers. More shared information allows producers to make clear choices for their operation and future security. Buyers and producers: please share information with NODPA, a trusted source for independent information over the last 24 years, either by email or on Odairy.
Maple Hill reports that they continue to sign more on more producers in Pennsylvania, New York, and are now expanding into Ohio, with their unique incentive plan and higher Pay Price. The expectation is that most will finalize the move within 6 months. The one big question that producers ask before moving to Maple Hill is how secure their market is after it crashed in 2022, leaving many producers with no market. Maple Hill representatives reassure producers that they now have completely new management, tighter controls on supply, access to capital and are expanding in response to market demand.
Horizon is also signing up larger operations in western New York that are closer to their processor and have good access for tractor trailers, with a Pay Price reportedly up to $45/cwt, a signing bonuses and no-interest loans on top of the higher milk price. Representatives for Horizon’s new owners, global investment firm Platinum Equity, have not responded to questions about their future or their recent recall of packaged products, which raise questions about their supply chain and choice of processor.
CROPP Cooperative producers are moving to other buyers and are upset about CROPP’s new move to encourage larger operations with its recent volume incentive and unconfirmed reports that a 1,200+ cow dairy in Texas will be in the Reserve Pool, giving the cooperative more flexibility in paying a higher Pay Price. Reports are that CROPP is buying spot milk at over $40/cwt in the mid-west and recently talked of a second “loyalty” pay increase of $2/cwt for the months of March through October 2025 that requires signing a special contract agreeing to remain with the coop another year.
Some producers are moving to the secure market and higher Pay Price offered by Upstate Niagara, long time leaders in the northeast in responding to producers’ needs and their ability to offer security as a handler with their own processing and large conventional operation. For those that are concerned about the limited market for organic milk that Upstate has, notably Wegman’s, which Upstate supplies with fluid organic milk, are planning to open three more stores in the northeast, plus Upstate continues to export organic dairy to Canada. Their 2025 Pay Program offers a base price of $29.5/cwt, an Organic Market Adjustment Premium of $2.75/cwt and a $2/cwt Seasonal Production Incentive for 5 months of the year. They have a volume premium of $.15/cwt over 75,000 pounds up to $0.50/cwt for over 300,000 lbs. and an SSC quality program that maxes out at $3/cwt for a monthly average of under 100,000/ml. Their Incremental Growth Adjustment program will pay $4.00/cwt each month for incremental milk production over the prior year. They also have an incentive program for those transitioning to organic certification. There is no hauling charge for every-other-day pick-up.
Producers who sell directly to Stonyfield report that their Pay Price and incentives are comparable to Upstate and higher than CROPP Cooperative.
Update on DMC and ODMAP Programs
The DMC Decision Tool on USDA’s Farm Service Agency website had not been updated with its DMC margin forecasts for 2025 yet. Hoards Dairyman reports that CME futures indicated that 2024’s large drops in the DMC feed cost formula components will not be repeated this year and that any significant DMC margin changes this year will be driven mostly by changes in the All-Milk prices.
On December 23, 2024, the USDA's Farm Service Agency (FSA) recently announced the second round of payments through the Organic Dairy Marketing Assistance Program (ODMAP) 2024. Of the $58 million allocated for the 2024 ODMAP, the first round of payments totaled $23 million. The second payment will be made automatically to those that applied for the first 2024 payment and if you have not received it, you should contact your local FSA office. The ODMAP 2024 has been paid out in two payments of 75% of the $1.68/cwt initially determined by FSA for a producer’s projected marketing costs in 2024 based on their 2023 costs, and the other 25% in this second round. FSA projects that the second round of ODMAP 2024 payments provides an additional $8.7 million to dairy producers, bringing total payments from ODMAP 2024 to over $31 million, still leaving $27 million of the revised amount available. Of the $105 million allocated to the program in January 2023 approximately half has been paid out over a two-year period. Again, this highlights the lack of data on organic dairy expenses published by USDA. Unfortunately, for some reason, the most recent Continuing Resolution in Congress in December 2024 to keep the Federal Government working, excluded a very small amount of increased money for organic data collection.
H5N1 avian flu
Having been very slow in adopting any measures to control the spread of H5N1 in dairy livestock, USDA is now increasing testing at processing plants and bulk tanks. Transmission to a virus that can be spread by humans has not happened yet, but livestock workers who directly handle dairy cows have been affected. The most current advice is to have and implement a biosecurity plan; limit movement of all animals; restrict visitors and any crossover of dairy workers with domestic poultry exposure. The other piece of advice is just plain common sense – ensure a stress free environment for all affected animals.
Posted: to Industry News on Sun, Jan 12, 2025
Updated: Sun, Jan 12, 2025
