By Ed Maltby, NODPA Executive Director
Organic milk is short, and producers continue to look for improvements in their Pay Price package. There are many issues that may influence decisions about whether to stay with the buyer you know or the financial necessity of finding another that will pay a more realistic Pay Price package. This has been further complicatsed by the CEO of CROPP Cooperative Jeff Frank stepping down on March 28 to join a non-competing company. Shawna Nelson, the executive vice president of membership, has been announced as the new CEO. I say ‘package’ when talking about Pay Price because it is not just the dollars per cwt but also factors tied to reliability, strong business record, commitment to the region, brand ownership and governance, hauling contracts and routes, handler agreements, requirements over and above organic certification and the ability to maintain a stable market into the future.
For many who perhaps have grown up on personal relationships with buyers, there is disillusionment with how they have been treated when they start the process of evaluating their current buyer. To be told that they no longer match the buyer’s current business plan, so they can leave or stay but conditions will not change, is no encouragement for a future relationship. Buyers have been reported as exaggerating either the farms they have already signed or the satisfaction that other farms have with their relationship and Pay Price. If you are thinking of changing buyers, always have a conversation with other producers and their families to verify their claims. Contracts vary and there are significant differences between a membership agreement and a contract, especially on changes in Pay Price, quota, and cancelling contracts. Your biggest asset here, apart from asking detailed questions, is talking with other producers who have experience with different buyers. Now that DFA will not provide handling services to members who change organic buyers, there is also the uncertainty of finding a handler.
NODPA can assist with help over understanding contracts and recommending legal assistance, as a 501C5 producer group, and by putting producers in touch with each other to share experiences.
Below we have a list of contacts for milk buyers who responded to our request to have their information made public or didn’t respond:
In the Midwest, organic milk is reported as being sold locally and to the eastern US, for $45+ on the spot market. Midwest Pay Price prices are averaging approximately $32/cwt; CROPP is reportedly short on milk from their own direct supply.
For those of you who have not worked with Byrne Dairy in NY, it has been in operation since 1933 and in organic processing for 7+ years, with two processing plants; one in East Syracuse, New York and one in Cortlandville, New York. They process both ESL and aseptic fluid products. The organic farms that currently ship to them are in the Central New York Region, but they are open to investigating all organic milk opportunities outside of that region. They do their own hauling in the Central New York Region and contract with another hauler in Northern New York. As far as Pay Price, they say they are very competitive, with a base price plus quality premium, butterfat premium and volume premiums. They pay the same price every month of the year and are open to negotiating with producers and to discussing specifics. Leslie Ball is their contact person at: cell phone (315)382-2782 and Email: lball@byrne1933.com
After two years in the position, CROPP Cooperative/Organic Valley CEO Jeff Frank is stepping down on March 28 to join a non-competing company. Shawna Nelson, the executive vice president of membership, has been announced as the new CEO. Current CROPP Board members are: Arnie Trussoni, Dave Hardy (Board President), Scott Stoller, Josh Tranel, Elvin Ranck, Ernest Martin, Tim Kline. CROPP recently announced it is moving into the very competitive non-dairy creamers market with the launch of four new products: Cinnamon Spice Oat Creamer, Caramel Oat Creamer, Vanilla Oat Creamer and Oatmeal Cookie Oat Creamer. The dairy, nut and lactose-free creamers have 30 calories per serving and are made with oats sourced directly from their member farms. Not so sure that these coffee flavorings can be called creamers if they don’t have any cream. I also question what this does to the viability of organic dairy farm members who need the Coop to maximize the price for all components of the milk they produce rather than spend time, money and consumer good will on promoting a non-dairy product in a saturated market.
Branded products are taking a hit as grocery food inflation is driving the private-label boom. In 2024, sales of store brands grew by $9 billion year over year, reaching a record $271 billion, according to new data from the Private Label Manufacturers Association (PLMA) 2025 Private Label Report, compiled by market research firm Circana. This impressive growth represents a 3.9% rise in dollar sales compared to the previous year.
In refrigerated white milk, Private Label is ranked first; HP Hood Inc. second; Fairlife LLC, third; and Horizon Organic Dairy LLC, is ranked fourth with $699 million in sales, an increase of 87% Year on Year (YOY), and 105 million in unit sales, an increase of 57% YOY. CROPP/Organic Valley was ranked sixth with a 16% YOY dollar sales increase to $270 million, while unit sales jumped 13% to $45 million. Maple Hill had an impact on sales of Kefir where dollar sales and unit sales both picked up 36% YOY. Dollar sales came in at nearly $3 million, with the company selling 429,188 units during the recent 52-week period.
Dairy milk sales for the 52-week period ending Dec. 1, 2024 according to Chicago-based market research firm Circana.
|
|
Dollar sales (millions) |
% change vs a year ago |
Unit Sales |
% change vs a year ago |
|
PRIVATE LABEL |
$9,562,182,068 |
1.20% |
2,949,726,558 |
0.00% |
|
H P HOOD INC |
$1,216,976,392 |
3.80% |
224,295,071 |
2.50% |
|
FAIRLIFE LLC |
$782,628,137 |
27.60% |
164,605,045 |
21.20% |
|
HORIZON ORGANIC DAIRY LLC |
$698,716,498 |
86.60% |
105,105,669 |
57.10% |
|
PRAIRIE FARMS DAIRY |
$337,395,531 |
−6.2% |
92,751,120 |
−6.2% |
|
ORGANIC VALLEY |
$270,475,171 |
16.00% |
44,600,027 |
13.10% |
|
HILAND DAIRY FOODS CO LLC |
$189,412,013 |
0.60% |
53,775,517 |
0.00% |
|
BORDEN DAIRY CO |
$119,125,141 |
19.90% |
32,075,875 |
13.30% |
|
KEMPS LLC |
$117,422,862 |
4.70% |
36,482,461 |
7.50% |
|
DARIGOLD INC |
$90,629,594 |
−2.7% |
23,467,211 |
−2.8% |
|
Total category* |
$15,303,741,280 |
1.70% |
4,231,999,430 |
0.20% |
The 2018 Farm Bill authorizes the Dairy Margin Coverage (DMC) program, and the American Relief Act, 2025 extended provisions of the 2018 Farm Bill and amends Section 1403 of the Agricultural Act of 2014 (2014 Farm Bill) authorizing DMC for coverage year 2025. The USDA’s Farm Service Agency (FSA) enrollment period for DMC runs from January 29 to March 31, 2025. If you are going to enroll for this year, don’t leave it too long as FSA personnel may be stretched thin with all the uncertainty about those that have been fired or taken the buyout. Funding for this program appears safe and enrollment may be good risk management with the uncertainty over tariffs, which may affect dairy exports that are used to balance the conventional milk supply. USDA FSA predicts that the margin will average $12.37 over the year with a range of $13.84 to $11.06. The All-Milk price has an average for the year of $22.03/cwt and a range of $24.09 to $20.58/cwt. Corn never makes it out of the $4/ bushel and Alfalfa averages around $200/ton. It is more of a gamble for organic dairies this year than many other years but we don’t know what will happen tomorrow let alone in 6 months’ time!
Posted: to Industry News on Fri, Mar 14, 2025
Updated: Sun, Mar 16, 2025
