The organic milk shortage

hannaford organic milk shortage sign

A sign on the dairy case at the Hannaford in Albany.

Over the last month or so we've noticed signs popping up on dairy cases at both Hannaford and Price Chopper noting that there's an organic milk shortage. And the shelves in the case have appeared rather bare at times. (We were the ones who took the last half-gallon of organic milk at the Slingerlands Price Chopper the other day. Sorry about that.)

So, what's going on?

The short answer

It's a matter of supply and demand. From a sign posted in the Hannaford on Central Ave in Albany:

Dear Customer,
The growing popularity of organic milk has led to a supply shortage nationwide. Though we continue to offer organic milk products, the shortage has limited the amount we have available. We expect to return to more consistent levels in April. We apologize for any inconvenience. Thank you.

Eric Blom, a spokesman for Hannaford, told us via email that the supermarket chain has seen "a substantial increase in demand for organic and natural products in recent years." And it's not just milk -- Hannaford's also been dealing with a shortage of cage-free eggs. (Price Chopper didn't respond to our questions about the situation. If it does, we'll update.)

The organic milk shortage is nationwide -- but the New York Times reported at the end of December the supply/demand imbalance has been most acute on the East Coast. And that's meant emptier shelves and higher prices. We asked Blom about higher prices, but he said Hannaford doesn't comment on pricing of specific products for competitive reasons. [NYT]

The longer answer

Like most things, the organic milk situation is a little more complicated than it first seems.

It's true, demand is rising -- sales of fluid organic milk were up 13 percent last year. And with the increasing demand, you'd think an increase in supply would be following. But that shift hasn't happened smoothly because organic dairy farmers say they're getting hammered by rising costs for inputs such as feed and fuel.

Ed Maltby -- the executive director of the Northeast Organic Dairy Producers Alliance (NODPA), an org that represents organic dairy farmers -- tells us feed represents about 30-40 percent of an organic dairy farmer's total cost of production. And feed costs have increased more than 40 percent over the last year. Farmers say they can't afford to buy the feed necessary to produce more milk. So even as demand for organic milk is increasing -- and in some cases, the price, too -- the supply is not.

Maltby says an organic dairy farmer in New York explained it to him this way:

"Our farm has only seen $1.50/cwt* of that $10/cwt store shelf increase in our milk check, soon to be a $3.50/cwt increase, or 50 cents/cwt more than what we received a little over two years ago when organic corn was $300 a ton; this winter we are paying $525 a ton."

[A cwt is a "hundredweight", the standard unit of wholesale milk -- there are about 12 gallons in a hundredweight]

That's prompted NODPA to call for distributors and retailers to raise the retail price for organic milk -- and pass along that increase to farmers. The org is pushing for the amount farmers get paid for their milk to increase by about 16 percent in the short term, and about 28 percent over the long term. Without the increase, the org says more farms will go out of business or exit the organic market.

Organic Valley, one of the major organic milk processors, says it's raising the price it pays to farmers by $2 per hundredweight in March. Says the co-op in a press release: "As a farmer-owned cooperative, Organic Valley has historically adjusted its pay price to meet the needs of and assure a fair livelihood for its members."

The signs in both Hannaford and Price Chopper are predicting more stable supplies of organic milk by April. Maltby tells us he's not sure why. "Perhaps they are thinking the effects of a small increase in [amount paid to farmers] will allow farmers to afford to pay for increased feed, but the increase in pay price isn't enough for that. In May in the Northeast the cows will be out to grass which usually is when there is more milk but it's difficult to estimate what effect that might have."

It's not an easy business

Every few months there seem to be stories about dairy farmers in upstate New York scraping to get by. The business is hard -- for conventional dairies, organic dairies, and even those that have gone the boutique route. The challenge was highlighted recently when Milk Thistle Farm, an organic boutique dairy in Columbia County, announced it's shutting down. The farm sold much of its milk in NYC, where its products had a popular following and earned much praise from media outlets and chefs. Things had looked so bright that the farm was planning an expansion in northern Columbia County and hoped to start selling in the Albany market. But Milk Thistle owner Dante Hesse told NYT that the farm had a host of unexpected problems, and "The odds are just not in favor of small-scale agriculture." [Milk Thistle Facebook] [TU] [NYT]

Comments

I really don't know much about the inner workings of the agriculture industry, but this seems so sad to me. Farmers that work hard to produce quality products can barely support themselves. Shouldn't we place more value in our food producers?

I wish more was done at the retail and policy levels to help farmers, esp local farmers wherever they are. Maybe placing a cap on how much retailers and distributors can take of the final price and requiring a certain percent or rate goes back to the farmer, whichever is higher. It's rather ridiculous I spend 4 bucks a half gallon on milk at a grocer but only about 1.25 goes to the farmer, I think that is the math.

My dad is still a dairy farmer down in Orange County, and his whole life has been a big struggle. He doesn't farm organically, so at least he doesn't have that burden. But, it's getting harder and harder for him to pay the rising costs associated with feeding his cows (and his family). And, he farms that place all by himself, because no one is interested in working on a farm anymore. Man's never - and I mean never - had a vacation. And my mother - who is disabled - has to work full time so they can have health insurance.

Many people just take farmers for granted, thinking that milk just comes from the grocery store. And there's always a revolt when prices go up. Believe me, it's not the farmers who are benefiting from that price increase.

Did you know that milk wholesalers - who my dad sells to - actually charge HIM for the privilege of them taking his milk away? He has to pay a "stop charge" and a "hookup charge" to Dairylea, who uses HIS electricity to do the pumping from the tank to their truck. It's a crime. Or at least it should be. I keep trying to convince him to sell his milk for cheese, instead of for fluid milk, but he's a farmer and stuck in his ways.

Let's stop romanticizing farming - it's not fun, it's not all bucolic pastures and adorable baby animals, and it's not a great way to make a living. It's dirty, filthy, back-breaking 24/7/365 work that is done for the LOVE of animals, family, and the land. Let's start to RESPECT farmers and do what we can to see that they are actually able to earn a living.

OK, I'm good and angry now.

Sad news to hear that Milk Thistle has shut down. However there still is http://www.battenkillcreamery.com/ sold at the Troy's farmers market and is quite good, and then if you are REALLY GUTSY.... and want milk right outta da cow..."raw milk" head over to Harlemville NY to get some milk from http://hawthornevalleyfarm.org/

This is a good example of to much government interference with the pricing of milk. This is a ridiculous law the allows the government to control the pricing of milk but lets something like gasoline prices go up because somebody says there might be a hurricane in the Gulf of Mexico. It's unfortunate that the farmers don't have a powerful lobbyist like the oil companies trying to protect their interest. Just like everything else let the free market dictate what we pay for milk. Most kids they days are brought up on soda and juice not milk but the government doesn't tell the beverage companies what they can charge. I know a lot of farmers that have sold their dairy farms to developers because they can't make a living anymore. If we care about open space and the quality of milk we're drinking then lets tell our government to let the free market dictate the pricing not someone sitting in a downtown office building in Albany.

What? Where in this article does it say anything about the government regulating the price of milk? Is Jon on a ideological diatribe? Did any of the farmers complain about the government setting prices for milk? The story is obviously more complicated than that.

Dave,
Let me inform you of something that dairy farmers obviously know the government sets the price of milk here's a quick post below that maybe will enlighten you. If corn almost double's in price the government doesn't allow the farmer to increase the price by double so they are holding back demand so hopefully they can charge more it's call supply and demand.

Editors: Here's the link to the text that was originally included in this comment. (We'd rather you not copy and paste a whole page from another website.)

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