By Ed Maltby, NODPA Executive Director
The other day, I was asked how organic dairy producers were doing, and it was a rare privilege to immediately describe that Pay Price from most of the milk buyers was increasing to a level that covers the cost of production plus depreciation, and is close to covering the Total Cost to Produce Milk. With the continuing high price being received for calves and replacement organic cows, and heifers fetching a price reflecting the true cost of rearing them, producers are, hopefully, entering a position that they can recoup some of the losses from the last 7+ years without the assistance of Dairy Margin Coverage.
With the competitive market for organic milk, buyers have been increasing Pay Price and producers report that Upstate, Lactalis direct supply, and CROPP coop have all increased Pay Price and other premiums; Horizon is signing contracts at the $40+ mark; and new entrant Origin milk will be closer to $50/cwt but with more certification requirements. Maple Hill laid out their 2025 Pay Price in 2024 and will be increasing it to reflect the promised $45/cwt by the end of the year. For those who have decided to leave organic dairy, now is a good time to do it. For those thinking of transitioning to organic or expanding their organic acreage, buyers are offering financial assistance and some incentives to assist with that process
Currently, there is continuing uncertainty about how various tariffs and evolving trade relationships will impact farm operating costs, particularly equipment repair, construction, and capital investment. There is more information being released about cuts in employees at USDA. The most recent information is that more than 15,000 USDA employees have taken one of the administration's two financial incentive offers to leave the agency, representing about 15% of the its total workforce. At the USDA, 3,877 staff signed contracts in the agency's first Deferred Resignation Program in February and 11,305 signed contracts in the second round in April, for a total of 15,182 resignations, and the numbers could rise over the next month because employees over 40 were given more time to decide whether to leave. Those leaving include 674 county employees of the Farm Service Agency and 2,408 staff of the Natural Resources Conservation Service. In the Marketing and Regulatory Programs area, where the National Organic Program is, 478 employees will be leaving. There is unconfirmed information that 20-30% of the NOP staff has elected to take deferred resignation.
The final rule amending Federal Milk Marketing Order (FMMO) pricing formulas was passed by more than a two-thirds producer vote and will be implemented in all 11 federal orders.
The changes that will be implemented on June 1st 2025 are:
The skim milk composition factor changes, updating skim milk composition factors to 3.3% protein, 6% other solids, and 9.3% nonfat solids to reflect the industry’s higher solids production, will not be implemented until December 1, 2025.
The newly formed Coalition for Organic Dairy Exemption, which includes Aurora Organic Dairy, CROPP Cooperative and Horizon Organic, has been organized to launch an administrative appeal to exempt organic milk entirely from the Federal Milk Marketing Orders, arguing that organic milk is a wholly different product. First tried by the Organic Trade Association (OTA) in 2015 and again in the most recent Federal Milk Marketing Order Hearing in 2024, it has been rejected both times by USDA. Exempting organic milk from the FMMO would only affect fluid milk which has been estimated at 60% of the total supply by OTA. Calculating the effect on different brands is difficult as payments will vary by location of the packaging plant and volumes of milk on the conventional market within specific Federal Orders. While exempting fluid organic milk seems simple enough, there are complications for producers in the future, from losing the protection of the FMMO to whether they will benefit from the savings given to processors and handlers. We will have to see what the administrative appeal is asking for, what wording is used and what conditions are set for such services as balancing, data records and minimum pricing for producers. I have no wish to assist Aurora Organic to make more profit and further undercut the northeast fluid market, but if structured correctly, it could make more brands sustainable. My own preference would be to increase the volume exempt for all milk from the Federal Orders to assist smaller dairies like Strauss Dairy and encourage the few smaller operations that still exist that directly serve individual and small groups of producers. I’m sure conventional producers would be more open to that than an exemption for all organic fluid milk.
Origin Milk is a relatively new organic milk buyer in the area and I have exchanged emails with its team in order to share more direct information. Their requirements are USDA Certified Organic and Regenerative Organic certified, 100% Grass Fed to the American Grass Fed Association standards, A2/A2 milk and Animal Welfare Certified. Their 2025 Pay Price is $3.75/lb. times Total Solids plus any Quality Premium. This would average approximately $47/cwt. Origin has its own farm inspections, 2 times per year. Its quality premiums are standard and based on the average quality for the month (see below):
|
Standard Plate Count |
<5,000 = $0.25; <10,00 = $0.10 |
|
Somatic Cell Count |
< 100,000 = $1.00; 100,00-150,000 = $.75; 150,001-200,000 = $0.5; 200,001-250,000 = $0.25; 250,001-300,000 = $0.10; |
|
Preliminary Incubation Count |
<10,000 = $0.25 <20,000 = $0.10 |
|
Coliforms (Reference) |
<10 |
Origin A2 verification standards:
1. All dairy animals must be A2 tested by an approved A2 testing lab using an approved testing method. A2 testing may be verified through hair, blood, tissue testing or milk testing for individual animals. Bulk tank milk testing will not be accepted. Tests must show the genetic markers for parentage of an individual animal as A2/A2.
2. A herd list must be maintained on the farm, documenting the results of each animal's A2 genetic testing for reference during milking times and the annual review. An annual review of each farm's herd lists will be conducted on-site by an Origin team member to verify A2/A2 genetics for each individual animal. The annual review will focus on cross-referencing the herd lists with the A2 test list to ensure that only A2 animals are currently in the milking supply/herd. Any lactating animals that cannot be matched with an A2/A2 positive test will be required to be removed from supply or culled from the herd.
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:
Posted: to Industry News on Sat, May 17, 2025
Updated: Sat, May 17, 2025
