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Organic Dairy Farmers Squeezed By the Recession
Northeast Environmental Hub
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In this episode:

The downturn in the economy means consumers are buying less organic
milk and companies have more milk than they can sell.


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3:52 minutes (1.86 MB)
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The demand for organic milk and dairy products has grown by double digits each year since 2005, until this year. Now the shrinking economy has pushed consumer demand for pricey organic products down and that’s left some organic farms in trouble. As part of a collaboration with Northeast stations, Susan Keese of Vermont Public Radio reports.

VERMONT – In his organic pasture in Tinmouth, Vt., Leo Branchaud is listening to his Jersey milkers munching.

“I love the sound of cows eating grass. Ah! Make milk! Every bite’s more milk!”

Making milk has been a longtime dream of Branchaud’s. He and his wife Tami left their jobs in Rhode Island in 2004 and sank their assets into this 130-acre farm. At the time, Tami Branchaud said organic milk companies were offering attractive contracts to farmers in the rush to satisfy a market that was growing by 20 percent each year. They offered stable milk prices, something conventional farmers don’t have.

“The locked-in price, and the higher locked-in price, was definitely more tempting than staying conventional, which we started out doing,” said Tami.

Right now, organic farmers are making almost three times as much as conventional farmers. But it takes time and money for farmers to become organic.

“Cause’ the whole process is three years for the land and one for the cows,” Tami explained.

That’s how long the US Department of Agriculture said it normally takes to rid pastures and cows of synthetic fertilizers and chemicals.

The Branchauds love making organic milk. But today the downturn in the economy means consumers are buying less. Now, Tami Branchaud said the milk companies have more organic milk than they can sell.

“Just recently they have had to cut everybody’s price right across the board,” she said.

Lynne Bohan, a spokesperson for H.P. Hood, said her company has had to sell some organic milk at the much lower conventional price. The company has also instituted a new, month-to-month price structure.

“This has been a difficult time, and it’s affected the entire organic milk supply chain from processors to individual organic dairy farmers,” said Bohan.

Another processor, Organic Valley, is keeping its locked-in pricing system. But it’s asked farmers to cut back production.

“I’m going to have to but it’s going to be very, very difficult. I’ve already had to borrow money to meet my ongoing expenses,” said Rob Howe, a third-generation dairy farmer in Tunbridge, Vt., who went organic in 1995. “It was a concern of mine even at that time that too many producers could create an over supply and that has been the condition in the conventional milk market for ever.”

Ed Maltby of the Northeast Organic Dairy Producers Alliance, said some organic dairy farmers have gone out of business or returned to conventional farming. He predicts more will follow.

“Most of the farmers I’ve talked to, their lines of credit are maxed out,” said Maltby.

He added H.P. Hood is not renewing contracts with 10 farmers in Maine, leaving them scrambling for a place to sell their milk.

Among those farmers is Mark McKusick. When demand was growing, McKusick was approached by Hood to supply milk for the Stonyfield Farms label.

He made the change to organic and recruited other Maine farmers to do the same.

“And at the peak in the state of Maine, we had 33 producers,” said McKusick. “We had 66,000 pounds of milk everyday going to Oneida, N.Y. for HP Hood. And in three months time, we’ve gone from, we need another trailer load a day to, oh we got way too much milk.”

Some say the answer is a national program that regulates the supply of milk. Whatever the solution, it can’t come fast enough for farmers like Leo Branchaud.

“Right now we’re just going in debt so bad, we’re sinking and we’re like, okay, where it’s going to stop,” said Branchaud.

He said he’s convinced the market for his milk will bounce back after the recession ends. He just hopes he can hold on long enough to see that happen.

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