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Organic Pay Price Trends

Feed and Pay Price Updates

Added November 18, 2013. USDA Agricultural Marketing  Services (AMS) reports that total fluid sale for organic milk was up again for September 2013; 192 million pounds, which is 10.4% higher than September last year and 5.3% higher than 2012 year to date, with whole milk showing the biggest increase. Organic half gallons retail price is averaging 40 cents lower than 2012 at $3.48.

USDA AMS reported national organic grain and feedstuff prices were holding steady as the harvest season for corn and soybeans comes to an end. Demand for feed grade corn and soybeans remains good as the industry waits to see what yields are nationally with initial yields being higher than expected. Corn for June thru August delivery is being priced at $11 per bushel; about $4 per bushel lower than last year. There are variable reports across the country as to supply and price of organic feed, plus which feed mills contracted ahead and at what prices.

For more details on pay price and retail sales please go to:

payprice_update_11182013.shtml

For an update of Feed prices please go to:

feed_prices_11-18-13.shtml

Feed & Pay Price Updates

Addeded October 6, 2013. Any gathering of organic dairy producers always comes around to the question of pay price and the topic dominated discussions at the NODPA Field Days. At this year’s Field Days Kevin Engelbert gave an excellent key-note speech which pulled no punches about the reality of the situation and the need for producers to take action.

The producer meeting on Friday morning was dominated by concern about how pay price is being tied to individual inputs along with producer efficiency. Horizon (WhiteWave) has continued its MAP of $3/cwt (which has been in place for over a year) to the end of 2013 based on the continuing high price of corn, which misses the point that all inputs have risen and the base price needs to increase. Stonyfield Farm will be holding another producer meeting in Maine to continue their investigation about their own pool of milk in the Northeast complete with an array of experts that can help producers become more ‘efficient’. Producers across the globe have heard this before and many are insulted that these experts (mostly from academia) can tell them how to farm and cut their costs.

Perhaps if Stonyfield, Organic Valley and Horizon (WhiteWave) allowed business professionals and producers to examine their operations to evaluate them against the most efficient in their industry and suggest ways they could become more efficient and cut their costs, then producers would be more open to sharing their business records and production systems. Stonyfield still has yet to name a pay price for the milk they will purchase as part of their proposed pool of organic raw milk but have promised to make a decision by the end of the year on whether to proceed with purchasing milk directly from producers rather than from Organic Valley. In July Organic Valley informed producers of a 100% base quota (they proposed only paying full price for the base production agreed between the company and producer) with a $12.00 per cwt deduct for milk produced over that quota each month starting with October 1st 2013. At the September Organic Valley Board of Directors meeting, the quota was rescinded and all winter bonus payments were left in place ($3.00/cwt for December, January and  February). Some say milk supplies are long, some short. Organic fluid milk sales are growing steadily with some strong competition in the dairy case in the Northeast, including increasingly from MOO Milk from Maine.

For more details on pay price and retail sales please go to:

payprice_update_10062013.shtml

For an update of Feed prices please go to:

feed_prices_10-06-13.shtml

Feed and Pay Price

Added September 10, 2013. Organic fluid milk sales are growing steadily with some strong competition in the dairy case in the Northeast as Horizon Organic maintains the number one position in retail sales, with sales of store brand/private label in second place. While the average retail price remains fairly stable the low end of the retail price is currently $2.59 per half gallon which will be for in-store brand promotions and store brand loss leader promotions as organic milk is used to attract organic shoppers. Contracted pay price for producers hasn’t changed and with component and quality bonuses the farm-gate price is reaching the mid $30 per hundred for many producers but profitability for all but the most established organic farms is still dropping. Organic Valley has sent its member-owners notice of a 100% base quota (they will only pay full price for the base production agreed between the company and producer) with a $12.00 per cwt deduct for milk produced over that quota each month starting with October 1st 2013 production. This quota is to remain in effect until conditions improve for Organic Valley and will affect those producers who have recently expanded or those that regularly produce over their agreed base. While the cooperative leaders are optimistic that they will not have to impose an actual quota they are also facing an initiative by Stonyfield to investigate setting up their own milk pool in the Northeast. For more details and charts showing the growth of organic sales and the increase in the retail price over time please go to: LINK

Corn and Soybean prices are generally running under 2012 levels but hay and forage are higher, especially in the Midwest where the weather has followed an unpredictable roller coaster of extremes. While the contracted prices are lower there is no thought or indication that these slightly lower prices will be passed on to producers who purchase pelleted feed. In the Northeast 2012 had a summer drought that burnt up the pastures and cut the yields on field crops and hay and 2013 has seen excess rainfall causing late planting and delayed harvesting but the pastures are still growing. Corn yields in the East are generally predicted to be higher than those in Central US but concerns of an early frost and late planting makes predictions difficult.  For more information please go to:

Feed Update

Price Update

Pay price update

Added June 3, 2013. AMS reports this week sales of organic fluid milk were 186 million pounds in March 2013, up 0.1% from March 2012. Bucking the trend in general milk consumption, organic Whole Milk sales for March 2013 were at 49 million pounds, up 7.5% compared with March 2012 and up 5.2% year-to-date compared with last year. Organic Reduced Fat Milk sales for March were 52 million pounds, 1.6% above sales one year earlier and 0.9% above year-to-date. The average retail price for an organic half gallon in May was $3.43 with a $1.80 range in the highest and lowest prices ($2.59-$4.29). The trend in the average retail price for an organic half gallon has been slowly rising from $3.41 in January 2012 to $3.60 in May 2013. Producer are receiving approximately 38% of the retail price while non-organic producers receive approximately 50% of the retail price. For more details on pay price and the organic dairy marketplace please go to:

payprice_update_06032013.shtml

 

Pay Price Update

Added April 10, 2013. USDA AMS reports that the total organic fluid milk sales for January 2013 of 189 million pounds, down 1.8% from January 2012. Organic Whole Milk sales for January 2013 of 51 million pounds were up 7.2% compared with January 2012.  Organic fluid milk sales for 2012 were 4% higher than in 2011, an increase in retail sales of 3.25 million ½ gallons of organic milk or the production from 98 herds of 60 cows producing an average of 14,000 lbs. per year. As we have seen smaller herd disappear from organic production in the northeast one must assume that this increase in production comes from herds that have economies of scale or have the ability to grow their own feed.

The average retail price of an organic milk half gallon remains in the mid-$3 range at $3.59, but more interesting the gap between the high and low price has lessened with a price range of $2.79 to $3.99. The all-important gap between non-organic and organic retail price on average is now down to $1.55 per ½ gallon which is one of the lowest this year but not as low as one year ago when the price spread was only 96 cents, with conventional half gallons priced at $2.12 and organic half gallons priced at $3.08. For more details please go to:

payprice_update_04102013.shtml

Feed and Pay Price Updates

Added March 18, 2013. Organic milk processors and buyers have implemented increases in pay price through seasonal Market Adjustment Premiums (MAP’s) (with Horizon extending their seasonal payment to June 2013) but costs are rising as rapidly as the premiums are extended. Producers are reporting record high farm-gate pay prices this winter, between $35-$40/cwt with quality and component payments added, but are still having difficulty paying bills. The current market data shows that Horizon is still the leader for sale of retail fluid product but store brand is now in second place ahead of Organic Valley/Stoneyfield Farm brands. Market reports also indicate that more organic milk is going into manufacturing than usual at this time of year as producers adapt their production systems to a higher seasonal price. How this will affect the traditional spring flush of milk, which is usually put into manufactured product or sold on the non-organic market, is uncertain especially as last year the increase was much less than usual.

On March 8th 2013, AMS reported that total organic fluid sales for December 2012 of 174 million pounds, were down 4.3% from December 2011, but up 2.9% January through December 2012 compared with 2011. Organic whole milk sales for December 2012, 48 million pounds, were up 8.2% compared with December 2011, and up 10.4% January through December 2012 compared with 2011. Organic Fat-Reduced milk sales for December 2012 of 126 million pounds were down 8.4% compared with December 2011, but up 0.6% January through December 2012 compared with 2011.

For more information and historical charts on pay price:
payprice_update_03182013.shtml

For more information on the static level of Feed prices please go to:
feed_prices_03-18-13.shtml

For Organic Farmers Agency for Relationship Marketing (OFARM) target pricing for corn and livestock please go to: www.ofarm.org

 

Pay and Retail Price update

Added February 18, 2013. The current reality with organic pay price is that processors are offering increases in pay price though seasonal Market Adjustment Premiums (MAP’s) but costs are rising as rapidly as the premiums are extended. Producers are reporting record high farm-gate pay prices this winter, between $35-$40/cwt with quality and component payments added, but are still having difficulty paying bills. In the Northeast, both Horizon and Organic Valley are paying the same pay price before quality premiums are added, $30-31/cwt when seasonal MAP’s are averaged over the whole year, which is only $3 higher than 2008. With the expansion of Trickling Springs processor which produces an all grass fed organic product (“Cows are grass-fed**we allow minimal grain feeding for the cows body condition”) there is more interest in the work that Pennsylvania Certified Organic is doing on an all grass-fed label with the usual discussions around how pure the standards should be. More choices for producers in who they can sell their milk to is always good and in the past has brought higher pay prices. The producers in the West are feeling the strain as their cost of feed and purchased forage continue to increase and its time to address again the regional criteria for establishing pay price as the price of producing organic milk increases across the whole country. Perhaps this is an issue that the nine candidates for the CROPP Board can address along with the declining, and many times non-existent, profitability of organic family dairy farms.  For more information, charts and graphs on what is happening in the organic dairy sector please go to:

payprice_update_02062013.shtml

Parity Price: An explanation and critique
by ex NOSB member and organic dairy farmer Kevin Englebert

Added January 22, 2013. When the President of the United States and Congress attached as much importance to the retail price of milk as to the total economy of the nation, we know just how dysfunctional the governance in Washington DC has become. Apart from the simple question of what is wrong with paying dairy farmers a fair price for their milk, there was absolutely no understanding of the underlining principles behind the Agricultural Adjustment Act of 1933 and the rationale of basing the price that farmers are paid on a parity price equivalent – preserving the real value of the pay price farmers get for their milk. Kevin’s article provides a great insight into the economic, political, and social justice of parity pricing. A must-read for all farmers and consumers. To read the full article please goes to: in_parity_pricing_012213.shtml  

No increase in Pay Price as sales increase by
6 per cent & supply dries up

Added September 10, 2012. Times are tough! With no good news on the price of feed and no pay price increase in sight, milk supplies are tightening as producers cut back on purchased feed. While producers welcomed Horizon’s Organic continuation of their MAP, pay price is still at least $4 below the average costs of living for organic dairy family farms. There will also be the loss of MILC payments in September unless Congress can move off gridlock and limited legislation and pass a more comprehensive Farm Bill. The consumption of organic fluid milk in the first half of 2012 is up by 6% over the first half of 2011, despite increased retail prices. The national weighted average advertised price of organic milk half gallons at the end of August is $3.91, and the price range is $4.99 to $2.69 per half gallon. The lowest price for organic fluid milk is for store branded milk, which is highly advertised and used as a loss-leader by retailers, but brand-name product is also being discounted to increase sales, with an unusually low price of $3 per half gallon recorded in August 2012. The important price-gap comparison between the weighted average advertised price for non-organic half gallons compared to organic is $1.65, up from $0.99 a month ago.  During 2012, the price spread has ranged from $0.78 to $2.46. For more details please go to:

payprice_update_09102012.shtml

The Latest Pay And Retail Prices for Organic Milk

Added August 6, 2012. Processors report that the spring flush there is over and a minimal amount of milk is being shipped to conventional sales. The heat is affecting dry matter yield from pasture and the NOP has granted a temporary variance for Wyoming for the level of dry matter required from grazing. The expectation is for a milk deficit this fall. The most recent edition of the bi-weekly Organic Dairy Market News reports that  organic non-fat milk powder is being imported into the northeast from the west and New Zealand to satisfy the needs of specialty manufacturing plants (yogurt for example) who have specific quality and price requirements. Learn more >

The Latest Pay And Retail Prices for Organic Milk

Added July 16, 2012. The spring flush has ended and reports are that very few loads are going to non-organic sales. The heat is affecting dry matter yield from pasture and the NOP has granted a temporary variance for Wyoming for the level of dry matter required from grazing. The average pay price nationally is estimated at $30/cwt although that will vary by region. Learn more >

 

The Latest Pay And Retail Prices for Organic Milk

Added June 4, 2012. With input prices rising and processors re-emphasizing that pay price will not increase, it is increasingly important for producers to understand the retail market place, the relationship between price and retail sales, the price gap between organic and non-organic dairy products, and fluctuations in sales of fluid product. Learn more >

No light at the end of the tunnel
on feed costs and pay-price

Added May 8, 2012. Horizon Organic announced at the end of April that their MAP will be maintained at $3 or $3.50 /cwt (depending on geographic location) until the end of September 2012. Organic Valley pay price continues to be the highest of the national brands but some of the regional processors are currently paying more. The costs of  inputs have remained high, and farmers are struggling to break even. Producers across the country are still requesting another $3 per cwt to reach a breakeven point for 2012 based on sound economic analysis from independent sources using data from farmers in all area of the US. For more information please click here:

http://www.nodpa.com/payprice_update_05082012.shtml

The costs of feed continue to remain high with soy starting to climb rapidly. Some of the feed dealers are importing corn and soy or mixing pelleted feed with “green protein” (alfalfa) to lower costs. For more information ple3ase click here:

http://www.nodpa.com/feed_prices_05_08_12.shtml

 

Payprice update

Added March 9, 2012. From December 2010 to December 2011, the average retail price of organic milk increased by 14 cents per ½ gallon, sales increased by 14.3% over 2010 but producers received only an average of $1.25/cwt (6 cents per ½ gallon) of the total retail increase of $3.26/cwt (14 cents/ ½ gallon) for ¼ of the year.

Click here for more details on pay and retail price updates.

Pay Price Update

Added January 18, 2012.Tightening of supply of organic milk raised the lower end of retail pricing for branded product by as much as 69 cents to $3.19 per ½ gallon. The higher retail price in Connecticut, Pennsylvania and Indiana remaining stable at $4.49 -4.69 per ½ gallon with a combined average for 2011 of $3.75 per ½ gallon recorded from data in over 30 US cities. In response to the increase in cost and lack of supply the two national brands increased their pay price by $1-1-50 /cwt (4.3 -6.2 cents per ½ gallon) in August 2011 and Organic Valley plans to increase again by $2/cwt in March 2012 (8.6 cents per ½ gallon). For more on pay price and retail pricing, click on the articles below:

Pay Price & Organic Milk Market in September 2011

ADDED September 12, 2011. Organic dairy is in a surprisingly strong position with sales increasing at a double digit pace over last year and supply tightening across the country. With a healthy demand for product, a rising retail price but a low price gap between organic and non-organic, and a high conventional price to minimize the expense of balancing surplus milk, the outlook for organic dairy processors and consumers appears to be very healthy. MORE >

Pay Price Update
Added July 18, 2011. With a healthy demand for product, a rising retail price but a low price gap between organic and non-organic, and a high conventional price to minimize the expense of balancing surplus milk, the outlook for organic dairy processors and consumers appears to be very healthy. For more information on payprice, click here.

Feed price and retail demand both rising for organic dairy

Added May 16, 2011. Last year retail sales of organic fluid milk were stagnant, producers were being paid on utilization and feed prices were the lowest of many years. In 2011 the retail market has rebounded more quickly than expected, confounding economist expectations that consumers are only price sensitive in economically difficult times. Consumers are making choices based on organic practices and we have 20% growth in sales year over year and over 95% utilization of organic milk across the country. We also have a conventional grain market heavily influenced by the world climate disasters and the subsidy for ethanol, which has double the price of conventional corn and soybeans, making any response to the need for increased supply of organic feed expensive for producers. For more detailed information please go to:

Pay Price: http://www.nodpa.com/payprice_update_051611.shtml

Feed Price: http://www.nodpa.com/feed_prices_051611.shtml

Pay Price & Organic Milk Market Update, March 2011
ADDED MARCH 14, 2011. Record retail sales and rising prices. Learn more >

Pay Price Updates
Added January 17, 2011. Organic dairy will enter 2011 in a surprisingly strong position with sales increasing at a double digit pace over last year and supply tightening across the country. MORE >

Pay Price & Organic Milk Market in August 2010
Click here for the latest organic milk pay price information, including the retail gap between organic and conventional, total sales figures, price trends and more.

PAY PRICE UPDATE!
Added July 17, 2010. The full effect of the downturn in demand for organic dairy has been felt by all producers across the country, but we are now entering a period where demand is increasing. Get more details, charts and analysis by clicking here.

Pay price update
Added May 17, 2010. Organic milk products’ sales for March 2010 are up 3.6%, the highest month for sales since December 2008. Year to date, total organic milk products sales are up 2.7% and organic fluid milk sales for March 2010 in the Northeast Marketing Order were 7.8% higher than in March 2009, an increase of 2.01 million pounds of milk (1/4 million gallons) and 5.18 million more than in 2008, an increase of 23% from 2008 to 2010. Pay price is approximately the same as it was in 2008. Read more >

Pay Price Update
Added March 8, 2010. Pay price & the organic market in March 2010. MORE >

ORGANIC MILK PAY PRICE UPDATE
Added September 14, 2009. New England pay price since 2006, trends in organic fluid milk sales for the past four years, and new data comparing conventional and organic prices. MORE >

ORGANIC MILK PAY PRICE UPDATE
Added August 1, 2009. New England pay price since 2006, trends in organic fluid milk sales for the past four years, and new data comparing conventional and organic prices.
MORE >

Pay Price And Support Control
Added July 1, 2009. We all knew that the demand for organic milk could not continue to grow at the 20%+ it has over the last three years but the dramatic drop we have experienced this year is unprecedented and unpredictable. To shed some light on the situation we have an article that attempts to compare what the major companies are doing in this new market place. MORE >

ORGANIC MILK PAY PRICE UPDATE
Added July 1, 2009
New England pay price since 2006, trends in organic fluid milk sales for the past four years, and new data comparing conventional and organic prices. MORE >

Profitability of Organic Dairy, 2007
Added June 1, 2009. The results of an on-going financial analysis of Vermont’s organic dairy sector by UVM and NOFA-VT indicate farms in the study averaged $18,522 net farm earnings, a 0.5% return on owner equity.
Learn more >

Organic pay price declines as processors panic over spring flush of milk and declining growth in sales
Added March 6, 2009. An analysis of recent pay price drops by NODPA Executive Director Ed Maltby. Learn more >

Pay Price Update January 2008

Pay Price Update February 2006

Pay Price November 2005

Pay price Article August 2005

 

 

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