Organic dairy farms feeling pressure

Rock-bottom milk prices and high costs are hurting dairy farms of all types and sizes across the nation. The financial blow to organic dairy operations may be especially severe, according to a recent USDA analysis.

The May 19, 2009, Livestock, Dairy, & Poultry Outlook focused on the three states with the highest number of organic farms, according to Census Bureau figures . . . Wisconsin (433), New York (301), and Vermont (182). The report estimates that organic dairy farms have operating costs that are $5 to $7 per hundredweight higher than conventional farms. The March 2009 USDA monthly cost figures for conventional farms in Wisconsin, New York, and Vermont were $21.54, $26.55, and $24.94, respectively. In April, the average organic pay price in the Northeast was thought to average $27.43, according to the Northeast Organic Dairy Farmers Association.

Therefore, the New York and Vermont organic operations were losing about $4 and $5 per hundredweight, respectively. Wisconsin organic dairy farms were thought to be losing $3 per hundredweight. These numbers are based on USDA’s total cost of producing milk.

Softening demand for organic dairy products has compounded the problem. The contracts of 10 of Maine’s 65 organic dairies were not renewed this spring, according to the New York Times. Sales of reduced-fat organic milk in February were 15 percent lower than a year earlier, according to USDA data.