Organic dairy farmers struggle with decreasing demand

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(Host) 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 public radio stations, VPR’s Susan Keese reports.

(Moo, cattle munching)

(Keese) In his organic pasture in Tinmouth, Leo Branchaud is listening to his Jersey milkers munching.

(Leo Branchaud) "I love the sound of cows eating grass. Ah! Make milk! Every bite’s more milk!"

(Keese) 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 says 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.

(Tami Branchaud) "The locked-in price and the higher locked- in price was definitely more tempting than staying conventional, which we started out doing."

(Keese) 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.

(Tami Branchaud) "Cause the whole process is three years for the land and one for the cows."

(Keese) That’s how long the U.S. Department of Agriculture says 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 says, the milk companies have more organic milk than they can sell.

(Tami Branchaud) "Just recently they have had to cut everybody’s price right across the board."

(Bohan) "This has been a difficult time…and it’s affected the entire organic milk supply chain from processors to individual organic dairy farmers."

(Keese) Lynne Bohan is a spokesperson for H.P. Hood. She says her company has had to sell some organic milk at the much lower conventional price.

The company has instituted a new, month-to-month price structure.

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

(Howe) "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."

(Keese)That’s Rob Howe, a third-generation dairy farmer in Tunbridge, Vermont, who went organic in 1995.

(Howe) "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 forever."

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

(Maltby) "Most of the farmers I’ve talked to, their lines of credit are maxed out."

(Keese) Maltby says 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. In 2004, 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.

(McKusick) "And at the peak in the state of Maine, we had 33 producers. We had 66,000 pounds of milk everyday going to Oneida, N.Y., for H.P. Hood. … and we’ve gone from, ‘We need another trailer load a day,’ to, ‘Oh we got way too much milk.’"

(Keese) 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.

(Leo Branchaud) "Right now we’re just going in debt so bad, we’re sinking and we’re like, okay, when’s it going to stop."

(Keese) Branchaud is 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.

For VPR News I’m Susan Keese.

(Host) Northeast environmental coverage is part of NPR’s Local News Initiative. It’s funded, in part, by a grant from United Technologies.

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