Certified organic mega-dairies, a vertically-integrated dairy industry and an increase in the number of certified organic dairy cows – from 41,000 in 2001 to well over 200,000 a decade later – have all contributed to the commoditization of the organic milk market, said NODPA Executive Director Ed Maltby.

Maltby emphasized that this commoditization has been the impetus behind the 8% price drop per hundredweight (cwt) for certified organic milk. Prices fell from a high of $36 per cwt in 2014-15, when organic milk supplies fell short of demand.

With a surplus of certified organic milk on the market today, NODPA producer panelists shared their thoughts and strategies on keeping the Northeast’s organic dairy farms viable despite the industry’s challenges. That insight was the focus of the keynote session, “Adapting to the New Realities of Organic Dairy: Where do we go from here?”

The panelists were Annie and Ryan Murray of Hidden Meadows Dairy, Jim and Anne Phillips of Triple 3 Livestock and Vaughn Sherman of Jerry Dell Farm, all in New York; as well as Pennsylvania producers Roman Stoltzfoos of Spring Wood Dairy and Forrest Stricker of Spring Creek Farms. They all agreed with Maltby’s assessment that the organic dairy sector is facing challenges today due to its growth from a niche item to a mainstream product, and the pay price is not sustainable long term.

Finding a means of reducing costs or adding value, diversifying the dairy and cooperating with other regional, small organic dairy farmers to market and brand organic milk as distinct from industrialized organic production were the repeated themes for surviving this organic dairy crisis.

Coping: Low prices

When asked how they have adapted to the decreasing pay rate for certified organic fluid milk, Stolzfoos reported asking his landlords for reduced land rental rates, as well as diversifying the income streams on the farm.

Stoltzfoos, who has a herd of 200 dairy cows, has found profitability in selling sides of grass-fed beef from cull dairy cows. This has increased their income by between $10,000 and $20,000 per year. He also found profit in diversifying livestock, adding pastured turkeys.

Stricker, whose 130-cow herd has been 100% grass-fed since 2010 and certified organic since 1999, has reduced the cost of purchased feed. By using a diverse mix of summer annuals in his pasture mix – including cow peas, turnips, barsica rape, sunflowers, millet and sorghum-sudangrass – he hasn’t had to purchase hay for the past two years.

The annuals have added several tons of dry matter to his pastures, and he’s seen an increase in milk production by about 4 pounds per cow. Bale grazing on pasture during the winter has helped increase soil health, and he no longer has a need for fertilizer. The overall production strategy is “to use the sun to feed the soil,” he said. “There’s not a lot of money or inputs needed.”

Stricker has also opted for once-per-day milking. “What we lose in milk, we lose in expenses,” he said. They can now do their own crop work too. But keeping the SCC low has been a challenge.

Sherman’s cows are Holsteins, and he is considering going grass-fed without changing his breed. For now, he’s asked the local grain farmers to drop their price by about 10%, to help him through the decline in milk prices. He’s also keeping his milk quality high and is counting on polled genetics to be a selling point moving into the future.

Sherman believes the organic dairy industry will survive and reinvent itself. “If we could be the highest quality industry,” he asked, “would that be a selling point?”

The Phillips milk 135 grass-fed cows and have invested in infrastructure to increase efficiency and keep labor costs down. The milking parlor, designed with the goal of aging-in-place, allows two people to milk the herd in one hour. Geothermal waterers and easy-to-use fencing makes the work of managed grazing easier. They both work off the farm and will continue to do so as part of a diversification strategy to keep the farm viable. They added sheep, which require little input, to help with cash flow, and have capitalized on the Easter lamb market for the past decade. Grass-fed bull sales also help the bottom line.

The Phillips are breeding with New Zealand genetics and are seeking a small-framed, highly productive grazing cow. They have been breeding for an A2/A2 herd. Grazing has changed the soil biology, and no outside inputs are needed.

“We maximize our components, as well as our milk quality,” Anne said, adding that the future of organic dairying is going to be found in increased milk quality, enhanced animal welfare and better enforcement of the requirements for certified organic production.

Unlike the other panelists, the Murrays are actively growing their herd of Jerseys, and are increasing production while simultaneously lowering per-cow costs. They are implementing a tighter grazing management strategy to increase dry matter intake on pasture, are increasing fertility rates and tightening the calving window to coincide with pasture availability, and plan on doubling the herd over the next three years. They aren’t on a milk quota system, so they aren’t concerned about producing more milk. They’ve experienced financial benefits after doubling their herd from 40 to 80 head.

Industry future

Each farm has adjusted to the lower fluid milk prices and the lack of buyers for certified organic milk, and they have adapted strategies best suited to their particular farms. This diverse group of organic dairy farmers also offered insights into the future of the industry as a whole.

Ryan Murray – a young farmer – emphasized that transferring land to a new generation of dairy farmers offers the potential to keep small organic dairy farms vibrant. He sees a need to enhance succession planning industy-wide.

Stricker urged dairy farmers to understand their costs of production. “How can you make wise business decisions if you don’t know what your margins are?” he asked.

Capitalizing on the distinguishing traits of certified organic dairy, such as high conjugated lineoleic acid and omega-3 content, as well as the positive environmental impact of managed grazing and other organic dairy practices, is a strategy that everyone agreed is necessary. Working together to educate consumers to distinguish the Northeast’s certified organic milk from that of the large-scale industrialized organic milk found on the market today is crucial.

“I think, as farmers, we’re going to have to work together a little bit more,” Stricker said in summary. “It’s a win-win situation for our farmers, our consumers and our communities.”  

NODPA held its 19th Annual Field Days September 26-27, 2019, in Canastota, New York.

Tamara Scully, a freelance writer based in northwestern New Jersey, specializes in agricultural and food systems topics.