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Organic dairies have Marketing Order concerns

Organic dairy farmers and processors have issues they would like to bring up should the USDA hold hearings on the federal milk marketing orders.

Adam Warthesen with Organic Valley says they have worked with seven other dairy processors and organic companies as the Milk Innovation Group to identify six changes needed to help fluid milk and value-added milk. “We are looking at how do we bring innovation and investment to value-added milk, the area that is growing for consumer consumption, and how do we make sure the burden for the 16-hundred farmers we represent doesn’t increase for our pooling and for our contribution to federal pricing.”

The changes include allowing processor hedging, eliminating the base $1.60 Class I differential, updating the shrinkage allowance for extended shelf-life products to 5%, exempting organic milk from producer settlement fund payments, and establishing a balancing credit for specialty fluid milk. “Our ideas are going to be how do we either seek a credit for organic and/or does organic really fit in the orders anymore as they’ve evolved over the years and as milk market and the dairy industry has evolved over the years.”

Warthesen says USDA will have to determine the scope of the hearing and the 41 proposals.  He says organic needs to be a part of that hearing. “We’re hoping our stuff gets included in that conversation and then, you know, these other hot topic areas of make allowance and the higher-of versus average-of, we have some interest in those because we’re part of the dairy industry like everybody else.”

He says traditionally, the organic pay price is already well above the regulated minimum blend price called for in the federal orders.