WCAX.COM Local Vermont News, Weather and Sports-Vt. Farmers Hurt by Suffering Organic Milk Sales

Vt. Farmers Hurt by Suffering Organic Milk Sales

Randolph, Vermont - December 11, 2009

Just three years ago organic milk was the equivalent of liquid gold. Customers wanted it-- and milk producers were struggling to keep up with demand. That's not the case today.

"Oh, it's night and day," said Lisa McCrory of the Northeast Organic Dairy Producers Alliance.

The bottom seems to be falling out of the organic milk market.

The Beidler farm in Randolph made the transition to organic nine years ago. Like many farms, they made the move when demand for organic milk was high, lured by the promise of a steady pay check.

"In a lot of ways organic has been a lifeline for farms like ours because price fluctuates more in a conventional market," Brent Beidler said.

That's still the case today, but the future of the industry is less certain.

HP Hood is going to stop buying organic milk in January. Only six Vermont farms have contracts with Hood, but most other processors are implementing quotas and are cutting pay. Farmers say the recession led to a drop in sales, creating a surplus of organic milk.

Almost two-thirds of Vermont's organic dairy farms have contracts with the processor Organic Valley. That co-op has asked farmers to cut production by 7 percent. Farmers who produce milk exceeding that quota are being compensated at conventional milk prices.

"And what we've done on our farm is reduce the amount of grain we're producing so the cows produce a little less milk so we're feeding more hay. That's been our approach," Beidler said.

"There's definitely producers that have decided that they've lost their market or have decided they're going to get out before they lose their shirt," McCrory said.

Almost 20 percent of all Vermont farms today are organic and many are confident the market will rebound once the economy improves.

"There's still growth and it's about 6 percent to 9 percent, it varies. But it's not the 20 to 25 percent growth that I'm sure most of these processors were counting on," McCrory said.

Organic Valley is taking over many of the Hood contracts which allow most farms to stay afloat in the short term.

But the long-term future of this industry is anyone's guess.

Keagan Harsha - WCAX News