Current Progressive Dairy digital edition
Advertisement

InFocus: Organic dairy growth offers premiums, challenges

Progressive Dairyman Editor Dave Natzke Published on 12 December 2016

The USDA’s latest Certified Organic Survey showed signs of a growing organic dairy industry – but one facing challenges.

Organic dairy growth offer premiums, challenges

advertisement

advertisement

Click hereor on the image above to view it at full size in a new window. 

The 2015 USDA survey was the fourth organic production and practices survey (previous surveys were in 2001, 2008 and 2014) on a national level. Volume and value of certified organic milk sales were up slightly in 2015, but the number of organic U.S. dairy herds and cows declined.

Milk again represented the largest category of certified organic agricultural products sales in 2015. Sales volume was estimated at 3.41 billion pounds, up from 3.39 billion pounds the year before. At $1.17 billion, the gross value of 2015 organic milk sales was up 8.3 percent.

Part of the stagnation in 2015 may be attributed to the types of herds surveyed. The 2014 survey also included “exempt” herds, those meeting organic standards but with annual sales of less than $5,000 and exempt from USDA certification fees. The 2015 survey did not include that designation.

Additionally, many organic dairy producers faced production and economic challenges in 2015. Driven by poor pasture quality and high feed prices, milk supply shortfalls – not a decline in demand – limited organic sales growth throughout the year.

advertisement

Individual states

Three states – Wisconsin, New York and Pennsylvania – were home to nearly one-half the certified organic dairy herds in the U.S. in 2015. However, California retained the crown for having the most cows producing certified organic milk.

2016 a different story

Organic certifiers from New York to Georgia and Texas to Idaho told Progressive Dairyman that interest in organic dairy and forage certification has grown substantially in 2016.

With conventional milk prices in a prolonged slump, year-long contracts provided organic producers a more stable price, yielding regional organic premiums between $16 and $25 per hundredweight over conventional milk.

Better weather and processor efforts to increase the number of organic dairy producers and the amount of organic milk produced paid dividends. January-August 2016 total organic fluid milk products sales were up 5.5 percent from the year prior.

Increased supplies are creating regional challenges. Organic processors are now seeking a balance between supply and demand, and trying to fit new organic farms within existing milk routes and processing capacity. Producers outside efficient core transportation and processing areas may pay a price.  end mark

advertisement

LATEST BLOG

LATEST NEWS