Organic dairy is no-crash cow, for now

NORTH JAVA — One small sector of the dairy industry is being spared a plunge in milk prices, a level that has dropped far below production costs for many farmers.

Organic producers tend to have their price locked in for a year, and that price this year is more than double the current $11 per hundredweight offered to conventional dairies.

“Nobody is on the gravy train, but if you have a stable price, that’s certainly better than this terrible crash,” said John Gould of Pavilion, whose farm in October became a certified organic dairy milking 150 cows.

Upstate Niagara Cooperative guarantees him $24 per hundredweight this year and that can be more if the milk has high butterfat and protein components. The cooperative would like more farms to make the transition to organic because of the demand for the product, said Bill Young, Upstate Niagara’s member services representative, and coordinator of the cooperative’s organic program. About 20 of Upstate Niagara’s 400 member farms produce organic milk.

“It continues to grow for us,” Young said Thursday in North Java during a seminar about grazing and healthy cows.

Gould was one of four organic producers on a panel, discussing the benefits and challenges of making the transition to organic production. The farms need a three-year transition time for their field crops and pasture to go pesticide-free. The milked cows also can’t receive antibiotics or hormones for at least a year.

The organic producers said their herd is much healthier, with far fewer feetRay C. 3/13/09 hoof? problems because they aren’t confined to concrete floors.

The biggest drawback is a drop in production with the cows, which can see a 20 to 30 percent decrease in their milk yield. Elbert Hoffman, a North Java organic producer, attributed that to less grain in the cows’ diet.

But even with less milk to sell, Hoffman said he’s doing better financially as an organic producer because of the higher price. He milks 80 cows and has been certified organic since May 2007.

He started working toward organic a decade ago, when he forecast the wild swings in milk price. Although organic producers will fare better than conventional dairies this year, Hoffman said organic farms struggled in 2007, when the conventional dairies were getting $20 or more for milk, nearly as much as organic producers. Their locked-in organic price didn’t account for the higher costs of production, especially with fuel.

Representatives from Horizon Organic attended Thursday’s seminar and the company said it wants more organic farms, especially in Western New York, which has access to the growing Northeast market, said Peter Slaunwhite, Horizon’s Northeast producer relations manager.

Horizon works with about 205 organic dairies in New York and would like to add 30 to 35 more in the next two years. Last year there was 20 percent growth for Horizon’s products and the company is projecting a 12 percent boost in sales this year, even in a struggling economy, Slaunwhite said.

“There will be room for more farms,” he said.

Organic milk tends to sell for $3.50 to $5 a half gallon, which can be triple the costs of conventional milk in stores. Slaunwhite said consumers continue to respond to organic.

Most of Horizon’s farms are getting $30 per hundredweight right now, and that will dip a bit in the summer when there’s less demand, he said. He expects all farms will receive at least $26 for their milk in the slow cycle.

There are about 350 organic dairies in New York, which account for about 6 percent of the state’s 6,000 dairy farms.

“We’re getting a lot of interest right now because the conventional price is so low,” said Lisa Engelbert, the dairy program administrator for the Northeast Organic Farming Association of New York. In her seven years with NOFA, the number of certified dairies has increased from 56 to 225.

Patrick George of North Java was one of about 50 people who attended Thursday’s seminar. He already uses a grazing system to feed his cows, and he applies “as little herbicides as possible” to his fields. The plummeting conventional milk price has him more interested in making the full change to organic for his 40 milking cows.

“I’m looking at it a little closer,” he said. “Right now the (milk) price is just terrible.”

Linda Cecchini of Medina was one of the four organic producers on the panel in North Java. She milks 70 cows and she said the animals seldom have health issues.

Their milk production only dropped about 10 percent as part of the transition to organic.

“It’s a great natural way to keep a dairy cow healthy,” she said.

The economics are also much better — and at least predictable.

“You know what you’re getting for your milk,” she said. “You’re not on that rollercoaster.”