Chasing dreams, chasing dollars: Organic grass-fed dairy sector sees growth

Holstein cows eating pasture grass at an organic grass-fed dairy farm. Photo: University of New Hampshire

A “perfect storm” of issues has hit hard New England’s organic dairy farms (average herd size of about farms with 100 or fewer milking cows).

For many years, organic dairies in New England and the Northeast U.S. remained viable and could compete with much larger dairy operations by finding their niche in the organic dairy sector, but now, those small organic operations are being hit especially hard, according to the University of New Hampshire, citing news that Horizon Organic and Maple Hill Creamery both announcing that they were ending contracts with more than 135 organic dairy operations across New England and New York.

Andre Brito, a scientist with the New Hampshire Agricultural Experiment Station and associate professor in the UNH Agriculture, Nutrition & Food Systems department, said that the current slump in the organic dairy sector has been fueled by an oversupply of organic milk around the country and less demand in general of fluid milk in the U.S.

“It’s caused a shift in the industry and some smaller organic dairy farmers are transitioning to organic grass-fed (OGF) operations, or are leaving the dairy sector altogether,” Brito said. “There are other factors as well, including the cost of feed, which has steadily risen over time. However, I still think the organic dairy industry is a viable sector, because organic milk is usually worth more than conventional milk.”

Brito noted that the OGF sector has been one area of the organic dairy sector that has not only seen growth but rapid expansion. Until recently though, little research identifying best practices for higher milk production was available for the OGF sector. Brito contributed to a recent paper in Renewable Agriculture & Food Systems journal highlighting a study into OGF dairy farmers that provides a better understanding of this industry and its operations and needs.

The study included a survey of 167 OGF farmers, gathering information on general farming information, herd management, and foraging and grazing management from these operations. Findings of this national survey included that the majority of OGF dairy farmers belong to the Plain (Amish-Mennonite) community, and that farms with higher milk production most often used Holstein cows, employed an intense regimen of pasture rotation and supplemented grazing diets with molasses and kelp meal.

As to why the OGF sector is growing rapidly, one major driving factor is the rising cost of grain, Brito explained, and another is that OGF milk fetches a higher price generally than traditional organic milk does.

“Pasture and forage are the cheapest source of feed in a dairy farm as imported grains can be very expensive,” he added. “With the margin of profitability declining over time for organic dairy farmers, one solution has been to reduce feed costs and shift to 100% forage diets and produce a type of milk that has a higher price point.”

Responses from the survey were generally concentrated in the Northeast (particularly New York) and the Midwest, suggesting that the majority of OGF farms are likely located in those areas, Brito said. While the organic dairy sector remains somewhat stagnant, more and more organic dairy operations appear to be transitioning to OGF farms.

Tim’s Take

In its announcement, UNH noted that in recent years, the organic dairy market has been oversaturated with organic milk products as an increasing number of dairy farms are attracted to the “generally higher price per gallon fetched by organic versus conventional milk.” At the same time, UNH noted that demand for organic milk has “faltered” in the U.S.

Some organic dairies in New England and the Midwest are doubling down and moving toward Organic Grass Fed dairy, in which cows are only fed forage sources such as pasture, hay and/or silage (no grain). OGF farms have to have cows on pasture 150 days per year (more than the minimum 120 days required for the USDA Organic program) and consume 60% or more of their total diet from pasture (compared to 30% in traditional organic dairies).

While producers can and should operate their farms according to whichever management protocols keeps them viable, the fickle choices of consumers can quickly change and a “new” label may fall out of favor (i.e., organic dairy), leaving producers to once again reassess their options.