Woman buying milk.
October 10, 2017

Penn State: ‘Organic Markets Quietly Trembling’

 |  By: Jim Dickrell

The United States Department of Agriculture’s recent announcement that Aurora Dairy was in compliance with organic standards has implications for organic dairy farmers nationwide.

Aurora Dairy milks more than 20,000 cows in Colorado and Texas, and an article in the Washington Post alleged Aurora was not complying with Federal organic standards. After an investigation, USDA found no violations.

“This finding has implications in the organic dairy industry,” says Dave Swartz, a Dairy Extension specialist with Pennsylvania State University. “Over the past couple of years, the organic milk markets have suffered from the same basic factor that has plagued conventional milk markets—namely producing more milk than is needed by the market. As a result, prices decline.”

Swartz notes that there are a number of Pennsylvania farms that are in the three-year transition phase required to produce and sell certified organic milk. Often, milk handlers help farms make the transition with both education and milk price incentives.

“But cooperatives and companies handling organic milk are not starting any new herds on that 3-year timeline,” says Swartz. “Currently, there is simply no need for additional organic milk.”

Over the past 20 years, small farms had converted to organic milk production to maintain profitability.

“If organic milk production standards can now be met on large-scale production operations, as Aurora has now proven to the satisfaction of USDA, then organic milk will become more of a commodity [and] prices will trend lower,” says Swartz.

“The organic market is quietly trembling with this disruptive vision of the future,” he says.

 

 

https://extension.psu.edu/dairy-outlook-october-2017

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