| Organic Milk Prices Increase, Demand Steady |
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| Written by Kiki Hubbard | |
| Friday, 07 March 2008 | |
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For years now, the U.S. has experienced organic milk shortages. In fact, certified organic milk – derived from cows fed a strictly organic diet and not administered artificial hormones or antibiotics – continues to be one of the fastest growing food products in the organic industry, growing about 20 percent or more each year. But with rising feed costs and less incentive to transition conventional herds to organic, the price of organic milk will steadily increase – and demand may not be met. USDA reports that farmers received more than $19 per counterweight last month for conventional milk. Compared to a year ago, when farmers received just more than $13, that's pretty good. Higher conventional milk prices, however, mean fewer farmers are inclined to transition their conventional herds to organic. Yet, in a volatile market, and as more dairies struggle to stay in the business, transitioning to organic is an excellent way to ensure a premium price for their products on into the future. Currently, there simply aren't enough certified organic cows in the U.S., and some companies, like Stonyfield, now import organic milk from abroad. The growing demand for organic milk is implicitly coupled with a need for more organic grain and alfalfa hay. Supply has not kept apace with demand, and prices continue to increase. This makes the transition period for conventional dairy producers more costly (and less attractive when they're already making more money than usual). Certified organic cows must be fed a 100 percent organic diet, and cows in transition spend a year eating the more expensive feed, but producers can't charge a premium until the following year. So, as we watch the price tags on our favorite organic coffee creamer, butter, and milk rise with the tide of higher feed costs, just remember: you're not being duped. Organic products should be affordable, yes, but they also need to be profitable for organic producers if we want to ensure a future where organic dairy is viable in the marketplace, offering consumers an alternative to products with no clear set of production standards. Sources: AP and Dallas News |
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