| integrated businesses that produce and process milk, have been exempt in most Federal Milk Marketing Orders (FMMO) from paying pooling costs that other handlers have been required to pay. This exemption was put in place some 70 years ago to reduce the administrative burden as producer-handlers were numerous at the time of the adoption of the FMMO system yet each was processing only a small volume of milk. That situation has changed over the years with some of today’s producer-handlers milking many thousands of cows and shipping milk across the country with the significant economic advantage of not having to pay the pooling costs that other processors must pay. For January 2009, the pooling cost would have been $4.85/cwt of fluid utilized milk, and most producer-handlers sell all their milk on the fluid market. Efforts are currently underway to rescind that exemption.
Pooling costs result from the requirement that producers of conventional milk receive a uniform blend price—the weighted average of the price of all four classes of milk in each order. To explain by example using the announced class prices and milk utilization from the Northeast Federal Marketing Order #1 for January 2009, 44.2% of the milk in Order #1 was used as class I milk and the announced class I price was $18.99/cwt. The class I contribution to the blend price in Order 1 is calculated as being $8.39 (the % times the price or in this case .442 X $18.99 = $8.39). Class II milk was 18% of the utilization and the price was $10.41/cwt so class II’s contribution was $1.87 (.18 X $10.41). Class III’s usage was 22.2% at $10.78, its contribution was $2.39, and class IV’s utilization was 15.6% at $9.59, and its contribution was $1.49. These four prices are added together to make the blend price. In this example, the blend price to the farmers therefore is $14.14 ($8.39 + 1.87 + 2.39 + 1.49 = $14.14)
The pooling cost comes from the fact that the handler who is utilizing class I milk (fluid milk) pays their producers the $14.14 blend price but then they are required to pay into the pool the $4.85 difference between the blend price they paid their producers and the class I price of the milk ($18.99 - $14.14 = $4.85). The processors of all the other classes of milk whose announced price is less than the blend price would draw dollars from the pool to enable them to pay their producers the blend price—in this example the class II processors would pull $3.73/cwt, class III would pull $.3.36 and the class IV would pull $4.55/cwt.
Class I—beverage milk products
Class II—soft manufactured products: ice cream, yogurt, cream products, condensed milk Class III—cheese
Class IV—butter & dry milk products
Therefore, any large producer handler bringing fluid milk into the Northeast Order currently has the economic advantage of not being required to pay the $4.85 differential into the pool for January 2009 milk that all the non producer-handler fluid processors are required to pay. Quite an economic advantage for sure!
The IDFA and NMPF petitions to amend the Federal Orders in regards to the producer handler exemption are supported by the Northeast Organic Dairy Producers Alliance (NODPA), for this issue affects the organic dairy industry as well as the conventional dairy industry. The effect on the organic market was first identified by the New York Organic Dairy Task Force in July of 2007, who then worked with representatives from NODPA on this issue. This included a trip I made to Washington DC last fall where I met with Dana Coale, USDA Agricultural Marketing Service (AMS) Deputy Administrator for Dairy Programs; John Mengel, AMS Chief Economist for Dairy Programs; and Jack Rower, Marketing Specialist with AMS, to discuss the issue and the FMMO amendment process.
On the organic side, the largest example of a producer-handler is Aurora Organic Dairy with 12,000 or more cows, headquartered in Platteville, CO. All their fluid milk being brought into the Northeast and on store shelves as private label brands of organic milk competes with local Northeast produced organic milk and has the competitive advantage of Aurora not being required to pay pooling costs while all the other major brands had to bear that cost.
The proposal submitted by NMPF and IDFA would still allow the exemption of small producer-handlers via raising the amount of production for exempt plants to 450.000 pounds of production per month. That would allow a farm producing 15,000 pounds of milk per cow per year to have about 350 cows and still be exempt from pool requirements. It would also allow a number of small operations to process their milk together and still fall under the small plant exemption, which is not possible with the producer handler exemption.
USDA’s Agricultural Marketing Service (AMS) has 30 days from the time of receipt of the petitions to make a decision if they will call a hearing on the matter. If so, the hearing must be held within 120 days. Then the process requires a 60 day period in which farmers can comment. Ninety days can be taken for AMS to come to a recommendation, followed by another comment period of 30 days, and then 60 days to a final rule. This expedited procedure, enabled by the recent Farm Bill, means that if AMS calls a hearing, a recommendation would be out by early 2010.
Posted October 2, 2008
Biological Farming Specialist Jerry Brunetti Tours New York
A break in the early autumn rain allowed farmers a chance to come out and hear well-respected holistic veterinarian Jerry Brunetti during four visits to sites around New York.
The tour was organized in conjunction with NOFA NY’s Organic Dairy Field Days and sponsored by the Cornell Small Farms Program, NY Organic Dairy Initiative, SARE, and the Grazing Lands Conservation Initiative. Brunetti’s talks emphasized the health benefits of a forage based diet to both animals and the environment. He also emphasized soil health on organic farms, discussing in depth the causes and remedies of common soil constraints. At each site, farmers and educators were treated to other perspectives from additional guest speakers. Pioneer organic farmers Hank and John Stoker of Sto-Ridge Farm shared experiences producing grain crops for their organic dairy, while developing a whole farm system incorporating composting, alternative fuel, and intensive grazing. At the Watertown Cooperative Extension office, Dr. Jerry Bertoldo, a veterinarian and the dairy specialist with the Northwest Dairy, Livestock and Field Crops team, discussed how management and a veterinarian’s therapies can be combined on a dairy farm to reduce the use of antibiotics. The two day series finished up at Lakeview Organic Grain Mill in Penn Yan, where Jerry spoke on alternative animal health care.
“The sickness prevention tips and alternative treatments Brunetti presented were very relevant to the issues organic farmers are facing”, said Fay Benson. “There have been calls for the elimination of certain type of antibiotics used on dairy farms and the re-labeling of others”.
To learn more about Organic Dairy events, visit the Small Farms Program Events calendar. To learn more about the New York Organic Dairy Initiative, visit the website.
Posted 5/9/08
Announcing Organic Dairy and Field Crops Summer Field Days!
July 29 (Tuesday): Organic Crops and Dairy Field Day, Bawden Family Farm, Hammond, NY (St. Lawrence Co.) 10am-1pm. Mark your calendar for this North Country field day about small grain production for an organic dairy farm. Brian and Elizabeth Bawden will share their experiences from years of grain production in less than ideal conditions. They will discuss combinations of grains and planting dates. They grow and process oats, peas, beans, spring wheat, Japanese millet, triticale and more for on-farm grain supply. Bring the family and enjoy the St. Lawrence River area after the field day! This workshop is co-sponsored by the NOFA-NY Organic Dairy Transitions Project. $5 NOFA Members, $10 non-members.
August 21 (Thursday): Organic Crops and Dairy Field Day, Sto-Ridge Farm, Cazenovia, NY (Madison Co.) 10am-1pm. Join us as pioneer organic farmers Hank and John Stoker share their farm and crop experiences with very special guest, Jerry Brunetti. The Stokers produce grain crops for their dairy, while developing a whole farm system incorporating composting, alternative fuel, and intensive grazing. This rare opportunity to learn from Jerry Brunetti will be a highlight of the summer and not to be missed! This workshop is co-sponsored by the NOFA-NY Organic Dairy Transitions Project. $5 NOFA Members, $10 non-members.
August 22 (Friday): Organic Dairy Field Day, Swendsen Family Farm, Akron, NY (Genesee Co.) 9am-3pm (lunch provided). Both transitional and certified organic dairies are welcome to this field day with Jerry Brunetti and other guest speakers. In the morning Jerry will discuss soil health and quality forages. In the afternoon you will explore topics such as pasture management, herd health, soil, and quality milk in small groups for in-depth discussions. This workshop is co-sponsored by Organic Valley/CROPP Cooperative, GLCI, and the NOFA-NY Organic Dairy Transitions Project. Free.
September 2 (Tuesday): Organic Dairy and Field Corn Trial, Twin Oaks Dairy, LLC, Truxton, NY (Cortland Co.) 11am-3pm. Together, Rick and Kathie Arnold and Bob Arnold run Twin Oaks Dairy, LLC and have been certified organic since 1998. Their high level of management allows them to achieve an average of 20,000 lbs of milk/yr with 130 cows. They grow 100% of their forage and about 50% of their grain needs on their combination of river bottom and side hill land. You will learn about their successful organic system as well as a SARE research project the Arnolds are working on with CCE to reduce the cultivation needs of organic field corn by using narrow rows and planting cover crops between the rows. This workshop is co-sponsored by the NOFA-NY Organic Dairy Transitions Project. $5 NOFA Members, $10 non-members.
September 9 (Tuesday): Organic Dairy Field Day, Willow Creek Farm, Belmont, NY (Allegany Co.) 10am-1pm. Looking for answers about your pasture and forage-based dairy production challenges? Join Chuck Deichmann at his organic dairy farm to discuss high quality forage production, forage testing, determining rations, and pasture on a progressive grasslands farm. An additional treat will be a discussion of the robotic milking system used on Chucks rotational grazing dairy and how it has eased farm time and labor resources. This workshop is co-sponsored by the NOFA-NY Organic Dairy Transitions Project. $5 NOFA Members, $10 non-members
Posted 1/29/08
Organic Dairy Updates
A. Fay Benson, Cornell Small Farms Program
Organic Milk Market: Growing Again?
In April of 2007 I wrote about the Organic Milk Market in NY being temporally full. The rapid saturation of a market that had been undersupplied since it began in 1994 was the result of 100 new dairies entering the market last spring. This was a 60% increase in dairies, bringing the number of certified dairies in NY from about 160 to 260 dairies. The increase was a response to the new 100% organic feed requirement that went in to effect on June 8th, 2005. Farmers in New York and regions across the country rushed to begin the transition process while they could still take advantage of the less stringent regulations allowing for some conventional feed in the first year.
Most opinions were that the organic market would not accept new dairies until the fall of 2008. The lack of an organic market was offset by the record prices of the conventional market, which allowed conventional dairies to have one of their best years ever. However, this past summer processors did add some new dairies to fill out existing organic routes. The pattern continued this winter, when three processors took action to start looking for new organic dairies wherever they could locate them. It would seem that the organic market has swallowed up the increase in production and is growing again. A field person for one of the organic processors reported that his company was trucking fluid milk in form western states again to satisfy the market here in the east.
There are two other reasons for the lack of milk here in the east. First, organic milk production follows seasonal patterns and is usually higher in the spring due to lush pastures. Second, the high price and reduced availability of organic grain is making it less accessible to organic dairies. What ever the reasons, it is evident that the organic milk market, which the USDA has measured to be increasing by 20% per year, is continuing to grow and need new farms. I recommend any farm considering the transition first address two questions. When can you get on the nearest organic truck route? Where will you purchase the grain you will need?
Organic Grain Shortage
This winter the NY Organic Dairy Initiative is sponsoring a number of meetings around the state to help both existing organic farms and those thinking of transitioning to organic production. Organic grain production is the most common topic because there is significant opportunity to be a part of this new market. Last year, while the number of organic dairy farms that entered the market increased by 60% the number of organic crop acres increased by only 8%. Prices that organic dairy farms are paying now are in the range of $450-$500/ ton of corn and $750-$800/ton of soybean meal. At these prices, farmers who are interested in transitioning to organic crop production can find a ready market. If you are looking for guidance on whether growing field crops organically is right for your farm, contact Fay Benson at (607) 753-5213 or afb3@cornell.edu. Fay can help arrange a meeting with a farm business specialist who will work with you to enter your farm data in to a spreadsheet developed by the NY Organic Dairy Initiative. This spread sheet will estimate the impact of the transition years and the profit potential once the farm receives certification.
Posted 1/14/08
Organic Dairy and Field Crop meetings
A series of three Organic Dairy and Field Crop meetings will be offered this winter in Dryden, NY. Whether organic or conventional, all farmers will benefit from these presentation/discussions by farmers, agency representatives and researchers. Each meeting will include a round table discussion on selected topics. To register and get directions for any of the meetings, contact Sharon VanDeuson at 607-753-5213 or shv7@cornell.edu. There will be a $5 charge for lunch.
Reducing the Grain Bill on Your Farm, Dryden, NY – January 30th
Funded by the NY Farm Viability Institute and Cortland County CCE
This meeting will help livestock farmers better use their forages to help replace the need for grains in their rations.
Debbie Cherney, Cornell Animal Science. Debbie will talk about how the grass plant stores energy and how farmers and their cows can harvest more of it. She will also talk about the new high energy grasses on the market.
John Stoltzfus, Organic Dairy Farmer, Whitesville NY. John will talk about the brassica and forage oat trials he did on his farm this past year.
We will have a representative from Dairy One explaining the different tests and what to do with the results once they are returned.
Cropping Concerns, Dryden, NY – February 27th
Quirine Kettering, Department of Crop and Soil Sciences, Cornell University. Quirine will speak about the nitrogen cycle with an emphasis on the nitrogen release from tillage. She will also describe a new soil test for organic nitrogen.
Meagan Schipanski, PhD Candidate Department of Horticulture. Meagan will discuss managing legume nitrogen fixation and how soil fertility affects nitrogen fixation rates of red clover, field pea, and soybean.
Farmer Panel. A group of farmers will talk about how they orchestrate their crop rotations.
Organic Valley Family of Farms - CROPP Cooperative Meeting in conjunction with Organic Dairy and Field Crop Meetings - March 7th
Dryden Fire Hall, Dryden, NY.
Dr. Guy Jodarski, DVM, Organic Dairy Herd Health Session
Dr. Linda Tikofsky, DVM, From Cornell's Quality Milk Production Services
Keith Waldron, Organic Milk Quality Management Strategies Session
From NYS-IPM Program - CCE Fly Control Management Strategies for Dairy Herds Session.
Posted 11/20/07
What's New in Organic Dairy and Field Crop Research
Demand for organic products is on the rise. Researchers from institutions across New York are taking organic field studies to new levels. Join researchers from Cornell University and Alfred State College on December 13th, 10:30am – 2:30pm, to hear the latest reports from a video conference location in your area. This meeting is a collaboration of the NY Farm Viability Institute, NY Certified Organic and Cornell’s Organic Program Work Team
The organic research reports will be held in conjunction with the NY Certified Organic (NYCO) meeting taking place at Jordan Hall on the Cornell University campus that day. NYCO is a group of organic farmers who have been holding organic crop meetings in Geneva once a month over the winter for the past 10 years. For the past 4 years they have opened up the topics to include organic dairy production.
Topics include:
Organic Dairy market: Fay Benson will give an update on recent developments in the organic dairy market including efforts by the Organic Dairy Initiative to strengthen New York’s position in the organic market.
Nitrogen and Field Corn: Quirine Kettering will give a summary of her work on availability of Nitrogen from natural sources for field corn, which includes a new organic N test for corn.
Corn Variety Testing: Margaret Smith will give an overview of the results of 4 years of corn variety testing on organic farms.
IPM Report: Don Rutz from the New York State IPM Program will report on work they have been doing on fly management including: Fly traps, Beauveria fungal pathogen, parasitoid releases, and dung beetles . We will also have the new soybean pest ID pamphlet developed by IPM
Alfred State Research Grants: Matt Harbur of Alfred State will talk about research grants that Alfred is working on.
Small Grains: Janice Degni will go over results from small grain comparison plots done on an organic farm this summer.
Udder Health: Linda Tikofsky from Cornell's Quality Milk Production Services will give an update on her study of udder health as farms transition to organic production.
Cropping Systems: Chuck Mohler and Brian Caldwell will discuss the results from an organic cropping systems study they have been working on for the past three years. They have seen a dramatic rise in soil health measurements, particularly Soil Aggregate Stability. They will ask for input from the group on soil health measurements and what farmers are seeing as they observe their soils under organic management.
Lunch will be provided at all locations. After lunch the audience will have the opportunity to generate questions for a panel discussion. To find and register for the site closest to you, see the list below. For more information, contact Fay Benson at 607-753 5213 or afb3@cornell.edu.
These meetings are sponsored by the NY Organic Dairy Initiative which receives funding exclusively from the NY Farm Viability Institute and is supported by the Small Farms Program at Cornell.
INTERACTIVE VIDEO CONNECTION SITES
Room 109 Rice Hall on Cornell Campus: 607-753-5078
Jordan Hall, Geneva Experiment Station: No reservation needed (dish to pass)
Allegany County CCE offices in Belmont: 888-256-2762, Ext 10.
Oneida County CCE, Oriskany: 315-736-3394 x129.
Livingston County CCE in Mt Morris: 585-394-3977
Jefferson County CCE,Watertown: 315-788-8450 Ext. 241
VIEW ONLY SITES
Tompkins County CCE, Ithaca: 607-753-5078
Franklin County CCE, N. Country Comm. College, Malone either: 518-483-7403
or 518-561-7450
Posted October 11, 2007
Call for reports for first Organic Dairy and Field Crop PWT Meeting
December 13th 2007 10:30 AM till 2:30 PM. The meeting will be video connected to various sites around the State. At present we have commitments at: Rm 109 Rice Hall on Cornell Campus CCE offices in Belmont, Allegany Co Jordan Hall, Geneva Experimental Station Other possible sites, Oneida Co, and Jefferson Co. This PWT will be held in conjunction with the NY Certified Organic (NYCO) meeting taking place at Jordan Hall that day. NYCO is a group of organic farmers that has been holding organic crop meetings once a month over the winter for the past 10 years in Geneva. For the past 4 years they have opened up the topics to include organic dairy production. Their passion for the topics is only surpassed by the dish to pass lunches they have at each meeting. A regular fixture at the meetings is the "roundtable problem solving" session that usually is held after lunch. We are looking for researchers and educators that have done studies related to organic field crops or dairy production who would be willing to give a short report to the group. Contact Fay Benson, Cornell Cooperative Extension - Cortland County, (607) 753-5213, afb3@cornell.edu
June 26, 2007
Organic Dairy Barriers and Opportunities
Compiled by Fay Benson, Organic Dairy Initiative Project Manager
On April 25th 2006, the first meeting of the NY Organic Dairy Task Force was held in Syracuse NY. One of the tasks accomplished was the creation of a list of barriers and opportunities for NY's organic dairy industry. The areas covered were:
- Challenges
- Opportunities
- Production Management Changes
- Business Management Changes
There were a total of 54 topics suggested across these areas. The topics were prioritized at the meeting by the 17 attendees, which included: 8 organic farmers, 4 educators, 3 organic dairy processors, and 2 observers. The topics were then sent out to 40 organic dairy farmers from across the state. We asked the farmers to prioritize the topics again. From these we received 21 responses. The final list uses the prioritization of these 21 farmers.
The Task Force Leadership committee was charged with creating subgroups of the Task Force to brainstorm actions to address the topics. They decided that some of the entries were similar in nature; to make the work of the subgroups more efficient, they grouped the entities into broad categories. These are the Breakout Catagories and the list of affiliated topics. The area (Chal, Opp, Prod Mgt, Business Mgt) and the priority ranking are in ( )s: the higher the number the higher the priority.
Download a PDF of the Report
April 23, 2007
Organic market temporarily full
By Fay Benson Cortland Co. CCE, Small Farms Educator
Due to a large increase of milk this spring, the three main processors put a moratorium to taking new milk until fall of '08. This is expected to be a short term situation to allow the processors to make new routes and to let new markets develop. The situation was caused by a large influx of dairies who were trying to get into the market before major changes were made on how they completed their transition.
The old rule required 80% organic feed the first 9 months of the transition for the cows, and 20% could be non organic this was usually the grain portion of the ration. The final 3 months, 100% of the animals feed had to be organic. After June 8th of last year, this rule was changed to 100% of the ration for the entire year needed to be certified organic. This change makes transition much more costly for dairies. The June 8th deadline caused more dairies to begin their transition before that date. Due to the low conventional milk price even more farmers started their transition last year. Northeast Organic Farmers Association (NOFA)-NY stated that on past years they receive roughly 20 new applications for dairy. Last year they received approximately 100 applications.
This is the information I have concerning the moratorium: 3-4 months ago Organic Valley realized that they had signed up enough milk for what they were sure they could market. They were telling farmers they weren't taking any new milk till fall of '08. On Friday April 13th I was holding a meeting in Watertown NY on organic farm management and the extension agent in that area received a call from a field rep from DMS saying that Horizon and Hood had contacted DMS saying they too were not taking any more milk till fall of '08. Some of the farmers at the meeting were very surprised at this since just this winter at the Horizon meetings in Northern NY Horizon was telling them that they were still looking for new milk. I contacted Upstate to see what their situation was, and they said they would take on a few more farms as their sales picked up but would choose farms along existing routes.
As to which farmers will be affected; OV, Horizon, and Hood said they would honor any letters of commitment they had issued. Any farmer who hasn't committed to a processor will not be able to sell their milk through them. I would say any farmer who has been receiving transition money from a processor are protected.
The processors that I have talked to all say they will take on new milk sooner as new markets open up. Some knew there were opportunities but needed time to make the connections. Up till now the organic market had only enough to supply the fluid market. This will be an opportunity to establish some hard dairy products that can help ease the spring flush.
Some have wondered if processors will use the current saturation of the market to weed out farms. I want to believe that size will not be a reason for harassment. In 2000 when I switched from Natural By Nature to Horizon. Horizon said they would never let any producer go because they were too small. At the time Horizon was investing in community milkhouses for the Amish so I believed them then and I hope that this is still their position.
Quality is another issue. At the 4 meetings I recently put on in Northren NY there were three producers who had been given notice about correcting their quality issues or risk a suspension from the truck picking up their milk. When I was shipping there were times when I struggled with quality, usually Pre Incubation (PI). Once I was taken off the truck for a week and it was good motivation for me to change some bad practices that I had. Yes it's too bad that processors use this during flushes but it is a necessary practice to keep quality up. I have heard the flip side of this also. I was having a conversation with three organic dairy producers who I knew quite well, and they were swapping stories about how they had received some bad quality reports for their milk. They had called the quality person with their processors and asked that the numbers be deleted or changed, and the quality person obliged them. I found this conversation particularly disturbing.
If a producer believes they are being treated unfairly about quality there are some avenues for them to respond. One would be contacting QMPS here in NY at:
Central Laboratory - Ithaca, NY
22 Thornwood Drive
Parkview Technology Center I
Ithaca, New York 14850-1263
(607)255-8202
QMPS has four labs throughout NY to work with producers to improve their quality or to double check their processor's findings.
New York only produces about 100 Million lbs of organic milk/year which is 1/3 of what is sold here.
April 10, 2007
Organic Grain Supply Tightens in 2007
by A. Fay Benson
As most organic livestock producers forecasted, this next year will see the organic grain market become even tighter on supply than ever before. The situation started last year with Dairy farmers trying to start their transition before June 5th when the 80/20 rule was changed by the NOP. This isn't the only reason but definitely contributed to the situation.
Mary-Howell Martens of Lakeview Organic Grain of Penn Yan reported at the Organic Dairy Task Force meeting March 13th that since March 1st they have been getting calls from dairy producers who have entered the final 90 days of their transition and are now looking for their organic grain supplies. She worried that there may not be enough grain to supply the market until harvest time. The Task Force, which is made up of Organic Dairy Producers, Grain Producers, Certifiers, Organic Processors, and extension educators, put forth a number of proposals to help the industry through this crisis.
 Get the word out to producers so they can have time to react to the shortage either by growing more grain, balancing rations to reduce the use of grain, harvesting forages to maximize their nutrients, or what ever method fits their operation.
Compile a list of dairy nutritionists who are familiar with pasture and the high forage diets utilized by organic farmers. This list will be sent to organic grain mills, processors, and is now posted in the Organic Dairy FAQ's section of the Organic Dairy Website.
Publicize fact sheets on growing and feeding organic grain crops, found on the New Farm Website and also NOFA NY's Website.
One situation we all want to avoid with the shortage of certified organic grain is the possibility of unscrupulous people who will sell non-certified grain to organic livestock producers. Everyone needs to verify their grain sources to avoid the risk of losing their certification because they weren't vigilant. For additional information on growing organic grain, visit the Organic Field Crops page. |
