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Organic dairy production, prices are down

FINGER LAKES—Organic dairy farms are being asked to cut back on production because most consumers want to buy conventional milk which is cheaper.
Skip Jensen, field advisor for the New York Farm Bureau, said organic dairy farms are feeling the same pinch as conventional dairy farms.  He said the whole dairy industry has experienced a downturn in prices the last six to eight months and that would continue for at least the next three to four months.
Fay Benson, with Cornell Small Farms Program, said from spring to summer of this year, he has seen organic milk prices in the store fall from $4.20 for a half gallon to $3.69 for a half gallon.  He added that in some stores in New York City a half gallon of organic milk was as high as $8.
Kerri Bartlett, on the Cornell Cooperative Extension Tri-County Dairy Team for Steuben, Schuyler and Chemung Counties, said in the current economy it is too costly to make the switch.  She explained the organic dairy farms are now seeing a downturn in the industry.  Specifically for organic dairy farms, producers in the state like Horizon Organic and Organic Valley are cutting back on the milk bought from area farms and are not taking on any new organic farms.
“They asked (organic) farmers to cut production,” said Bartlett.
The reason for this is people are not buying as much organic milk because it is more expensive than conventional milk.  Bartlett said in the current economy, consumers will look for the cheaper products.
Bartlett explained the base price of organic milk has gone down; from $22 to $24 per hundred weight of milk, to $20 to $22 per hundred weight of milk.  Bartlett said the producers notified farms of this decrease about a month ago.
Also because of the current economic situation, conventional farms do not want to make the transfer to being organic farms.  Bartlett said the the U.S. Department of Agriculture requires the transition to last three years, allowing the land and operations to be free of chemicals.  A farm cannot be certified as organic until after the three years so must continue to sell milk at the conventional price.  She said this is currently about $12 per hundred weight.  She explained, in the mean time, the farm must buy organic grain to feed the cows, which is twice the cost of conventional grain.  Bartlett said that is not an extra cost farmers considering the transfer want to have.
Mary-Howell Martens, one of the owners of Lakeview Organic Grain in Penn Yan, said organic dairy farmers are more cautious in their grain usage.  To be considered organic by the USDA, the cows have to be fed organic grain.  Martens said Lakeview Organic Grain sells to about half of the organic farms in the bottom half of the state and into northern Pennsylvania.
She said organic farms are considering selling cows or a decrease in grain feeding, so to decrease milk production.  One thing Martens said is helping is that the rain has meant good grain harvests for the farmers, so they are not trying to save money by cutting feed costs yet.  However, the price Lakeview Organic Grains is getting at harvest has gone down compared to last year from $9.80 per bushel to $7 per bushel.
Bartlett said the farms that have gone organic, stay organic.  She explained that after the farms put the time and money into the transfer, they do not want to revert back.

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