Some organic dairy buyers turning to imports

An organization representing organic dairy producers has found "no evidence" of producers transitioning from conventional to organic dairy under present conditions, according to the latest Organic Dairy Fluid Overview summary from USDA's Dairy Market News. This has led to increased U. S. consumer demand for organic dairy products being addressed with increased volumes of imported organic cheese and powders from Oceania.

The easing of winter's grip has many organic dairy producers assessing their organic feed situation. Organic feed in the Northeast remains tight and expensive. Organic grain is reported to sell for $667 a ton in some areas, with organic baleage selling around $60 for 4x5 bale second-cut clover in Northern Vermont.

A number of sellers of organic hay in New York are sold out, and have been for some time.


Contracting with organic producers

Competition among processors to contract with organic producers for milk, especially grass-fed producers, is escalating  in the Northeast in particular, but also increasingly in the Midwest.

A focus on processor margins continues to result in realignment of producers and processors to increase efficiencies in routes and organic milk volumes available to processing plants. This becomes more challenging in sourcing grass-fed organic milk, which is a separate category of organic dairy producers in terms of configuring routes and volumes for efficient processing in plants.

Paradoxically, the increasing consumer willingness to pay higher retail prices for organic grass milk is contributing to the tightness of organic milk overall. This occurs because procurement standards for organic grass milk, by definition, require more grass grazing than is required for organic milk not classified as grass milk. This typically results in fewer organic cows on a grass milk organic dairy than an organic dairy of the same acreage not producing grass milk. The grazing and non-grain feed requirements effectively limit organic herd expansion beyond a point for many organic producers based on available acreage. Increasing production is more tied to increasing acreage than with producers who can increase production using feed.


Dry organic dairy products

Manufacturers and customers for organic powders are keenly monitoring the magnitude of both a spring flush and levels of pasture forage available to better determine what direction the current challenging situation for organic milk supplies versus demand present.

Future pricing for organic powders will turn on these factors, and improvement is said to be needed to prevent further increases. Organic nonfat dry milk is reported to currently bring in the area of $4.61/lb., while organic sweet whey powder brings $2.13/lb.


Organic cow sales

At an auction in Oregon earlier this month, organic cows sold for slaughter continued to bring a premium over conventional cows. The top 10 organic cows auctioned brought an average price of $1.69/lb., compared with a $1.2157/lb. average for the top 10 conventional cows. The top 50 organic cows brought $1.5450/lb., versus $1.1547/lb. for the top 50 conventional cows.