Friday, May 29, 2009

Organic dairy farmers' boom turns to bust

The bad dairy business is worse for organic dairies. Caught between doubled prices for organic feed and a recession-driven drop in demand for their products, many have gone out of business, The New York Times reports. (Times photo by Caleb Kenna: Vermont dairy farmer Craig Russell and a calf)

The situation seems worst in New England, because of costs of transporting feed from the Midwest. "In Vermont, 32 dairy farms have closed since Dec. 1, significantly altering the face of New England’s dairy industry," Katie Zezima writes, quoting state Agriculture Secretary Roger Allbee: “We expect to lose a lot more farms this year.”

The U.S. Department of Agriculture "says sales of organic whole milk in February were 2.5 percent lower than in February last year, with sales of organic reduced-fat milk 15 percent lower," Zezima reports. That represents a big reversal; sals of organic milk more than doubled from 2006 to 2008.

Some farmers are trying to stay afloat by selling directly to the public. The Vermont House of Representatives passed a bill this month to increase the amount of raw, unpasteurized milk a farmer can sell to consumers, Zezima notes. (Read more)

1 comment:

Anonymous said...

The New York Times article unfortunately perpetuates the image of hapless farmers wiped out by the latest turn of the economy. The Organic dairy industry has been critically aware that demand has driven prices to an unsustainably high level, and the ability to meet that demand has been limited by the availability of feed. There are big growing pains! The more active folks in the industry have worked hard to match feed supply, the number of head, and the price to make a sustainable system. Everyone in the industry has known that a price drop was coming, either when demand slackened with the general economy, or when feed supply matched demand.

If Vermont growers are buying organic grain from the Midwest, the problem is really that not enough organic grain and forage is being produced in New England, New York and Quebec. I see this as a timely correction in a terribly unstable market situation. Organic feed production will rise, because the price premium will remain large (but less than obscene) and dairy producers will be able to make a profit with an organic premium of 20 to 50% instead of the 100 to 200% we saw recently.

More local feed and a more realistic retail price will keep organic dairies successful and organic milk popular.