Organic Dairy Farms Benefit Northeast Farmers and Regional Economies

11/21/2012

The organic dairy sector provides more economic opportunity and generates more jobs in rural communities than conventional dairies, according to a report released by the Union of Concerned Scientists (UCS). The first-of-its-kind study, "Cream of the Crop: The Economic Benefits of Organic Dairy Farms," calculated the economic value of organic milk production.

"Over the past 30 years, dairy farmers have had a choice: either get big or get out. Dairy farmers either had to dramatically expand and become large industrial operations or they went out of business," said Jeffrey O'Hara, agricultural economist for the Food and Environment Program at UCS and author of the report. "However, organic dairy production offers farmers another option-one that is better for the environment, produces a healthier product, and leads to greater levels of economic activity."

Based on 2008-2010 financial data from Vermont-the seventh-largest producer of organic milk-the report evaluates the economic impact of organic dairy farms. Annually, Vermont's 180 organic farms contributed $76 million to the state's economy and created 1,009 jobs. The report also used financial data from Minnesota to draw conclusions about the organic dairies in the Northeast and the Upper Midwest, two regions where organic dairy farms are prominent.

The report compares the economic value generated by conventional and organic farms in Vermont if those farms experienced a hypothetical increase in sales. Under this scenario, organic dairy farms would be expected to contribute 33 percent more to the state's economy than conventional farms, and employ 83 percent more workers.

Nationally, consumer demand for organic milk has jumped dramatically over the last decade, driven largely by ample evidence that it is more nutritious and less damaging to the environment than milk produced in crowded, polluting CAFOs (confined animal feeding operations). Organic dairy farming is now a $750 million industry, and annual U.S. organic milk sales increased 12 percent in 2010, 13 percent in 2011, and 5 percent in the first seven months of 2012. In some regions, consumer demand is so significant that retail grocery chains are having a hard time keeping organic milk in stock.

The Northeast's organic dairy farms are helping to meet the demand for organic milk in the region. And going organic can in turn help struggling dairy farmers. Clovercrest Farm, an 85-cow dairy in Charleston, Maine, is a case in point. Operator Steve Morrison transitioned the farm to organic production in 1997, with the vision of making it sustainable and expanding his herd to meet the growing public demand for organic milk. But improving and expanding his business over the years proved challenging.

Despite organic dairy farms' benefits and rising consumer demand, the U.S. Department of Agriculture's (UDSA) farm programs and taxpayer subsidies favor big CAFOs. The Farm Bill, which reauthorizes USDA farm programs every five years, currently provides relatively little support for the organic dairy sector. However, this modest federal support is vital to organic dairy farmers who already contribute to and stabilize regional economies, and it also provides support for farmers who want to transition to organic farming.

"Farming is a costly business and the milk checks barely cover my production costs," said Morrison. "Without support from the Farm Bill, it would be difficult for many small-scale dairy farmers to cover their production costs while still improving and expanding their farms."

To cut costs, Morrison began growing grain to use as feed, but he turned to the Farm Bill for assistance with capital improvements. Through grants from the Environmental Quality Incentives Program (EQIP) in the Farm Bill, Morrison was about to build gravel laneways, improve pasture development, and install manure management systems.

With the election decided, Congress has the opportunity to increase support for the organic dairy sector in the lame duck session. O'Hara's report outlines four primary policy recommendations:

.  USDA should revise the federal milk marketing orders, which establish the minimum prices dairy processors must pay to farmers. The antiquated minimum-pricing order policies were written in the 1930s and fail to account for the ways that organic milk production differs from conventional dairy farming.
.  Congress and USDA should offer a subsidized insurance program that is customized to the needs of organic dairy farmers. Insurance programs proposed in Farm Bill deliberations are only designed to support conventional dairies.
.  Congress should increase funding for organic agriculture programs.
.  Congress should fund and the USDA should implement programs that support regional food system development, such as rural development grants.

"More and more consumers across the country are choosing organic milk, but Washington hasn't gotten the message," said O'Hara. "Investing in organic dairy production would pay off in multiple ways by keeping small farm businesses afloat, promoting local economic growth, reducing farm pollution, and meeting growing consumer demand."