Continuing drought conditions in the West, particularly the San Joaquin Valley, are causing reductions in some organic dairy herds as farmers sell out and leave the dairy business, according to USDA’ Dairy Market News.
Drought intensity in the the San Joaquin Valley is still “D4 Drought”, the most extreme drought condition shown on the National Climatic Data Center/National Oceanic and Atmospheric Administration (NCDC/NOAA) U.S. Drought Monitor.
Even an established longtime organic dairy producer and board member of a western organic dairy producers’ organization is well into selling out, being “down to a few milkers” after having recently sold all heifers and young stock, DMN reported.
Some organic producers, after calculating the anticipated net gains from a year of organic milking versus the return for sale into slaughter, have decided their organic cows are “worth more dead than alive”, according to one organic organization representative.
High organic feed costs, a pay price that has not risen with costs, and now high beef prices, are all cited for the regional organic dairy exodus. Those organic cows not sold for slaughter, generally are sold into large conventional dairy herds rather than other organic herds.
When asked, a number of organic producers or representatives in the Northwest were unaware of new organic producers achieving certification of new organic dairy operations in the area during the last several years.
An organization representing organic dairy producers in the Northwest is finalizing release of a survey of organic producers in the region, surveying feed costs, water availability and pay prices from 2008 to the present. The results are expected to be released soon, and are intended to quantify the impact of feed costs and water availability on Western organic dairy producers in future discussions with processors about contracted pay prices.
A national organic dairy processor has offered “a few” organic producers in California, pay price increases, reported to be in the range of $2.00/cwt. This is specifically targeted on a producer basis, and not available to all organic producers.
In the Northeast, a multi-year effort by some Maine organic dairy producers to develop a processing and marketing cooperative has ended. The decision to close is attributed to inadequate processing infrastructure to handle increasing organic milk produced.
Organic milk sales into retail outlets had been expanding, as had milk production. The ultimate obstacle was said to be the cost of a necessary new processing facility, rather than with production and marketing. For at least several months, the milk will be sold to a national organic yogurt manufacturer and the co-op’s retail milk brand will no longer be available to consumers in the Northeast.
Also in the Northeast, a national organic processor will increase the organic pay price to contracted producers in the region by $1.00/cwt. on Aug. 1, 2014. The intention is for the increase to come from pass through to retail prices.
First cutting of organic hay in Maryland and Pennsylvania is progressing, but slightly lags the pace of last year at this time. First cutting in New York is in the early stages. Wisconsin is also early into first cutting, but some areas are very slightly ahead of last year at this time. Vermont pasture conditions are mostly good to excellent, with the first hay cutting also in the early stages.
USDA’s Ag Marketing Service estimated total March 2014 organic milk products sales at 212 million lbs., up 14.3% from March 2013 and up 15.6% year-to-date compared with last year.
Organic whole milk sales for March 2014, at 61 million lbs., were up 24.0% compared with March 2013 and up 22.4% year-to-date compared with last year. Organic reduced-fat milk sales for March, at 60 million lbs., were 15.2% above sales one year earlier and up 23.7% year-to-date compared with last year.
In contrast total conventional milk products sales for March this year were 2.7% below last year.