November 14, 2012

Organic Dairy Farms Benefit Farmers and Local Economies, Report Finds

More Farm Bill Investment in Organic Milk Would Benefit Consumers

WASHINGTON (November 14, 2012) – The organic dairy sector provides more economic opportunity and generates more jobs in rural communities than conventional dairies, according to a report released today by the Union of Concerned Scientists (UCS). The first-of-its-kind study, “Cream of the Crop: The Economic Benefits of Organic Dairy Farms,” calculated the economic value of organic milk production.

“Over the past 30 years, dairy farmers have had a choice: either get big or get out. Dairy farmers either had to expand dramatically and become large industrial operations or they went out of business,” said Jeffrey O’Hara, agricultural economist for the Food and Environment Program at UCS and author of the report. “However, organic dairy production offers farmers another option – one that is better for the environment, produces a healthier product, and leads to greater levels of economic activity.”

Based on 2008 - 2011 financial data from two major milk-producing states—Vermont and Minnesota— the report evaluated the economic impact of organic dairy farms. Vermont’s 180 organic farms contribute $76 million annually to the state’s economy and support 1,009 jobs. In Minnesota, 114 organic farms add $78 million to Minnesota’s economy annually and have created 660 jobs.

The report also compared the economic value that would be generated by conventional and organic farms in the two states if both experienced the same hypothetical level of increased sales. In Vermont, organic dairy farms under that scenario would be expected to contribute 33 percent more to the state’s economy than conventional farms, and employ 83 percent more workers. Similarly, in Minnesota, organic dairies would increase the state’s economy by 11 percent more and employment by 14 percent more than conventional dairy farms.

Consumer demand for organic milk has jumped dramatically over the last decade, driven largely by ample evidence that it is more nutritious and less damaging to the environment than milk produced in crowded, polluting CAFOs (confined animal feeding operations). Organic dairy farming is now a $750 million industry, and annual U.S. organic milk sales increased 12 percent in 2010, 13 percent in 2011, and 5 percent in the first seven months of 2012. In some regions, consumer demand is so significant that retail grocery chains are having a hard time keeping organic milk in stock.

Despite organic dairy farms’ benefits and rising consumer demand, the U.S. Department of Agriculture’s (UDSA) farm programs and taxpayer subsidies favor big CAFOs. The Farm Bill, which reauthorizes USDA farm programs every five years, currently provides relatively little support for organic dairy farmers. Worse, Congress failed to act on the now-overdue 2012 Farm Bill before the election, putting programs that currently help dairy producers and organic farmers at risk.

Now that the election is over, Congress has the opportunity to address this glaring discrepancy in its lame duck session. O’Hara’s report makes four primary policy recommendations for legislators:

•The USDA should revise the federal milk marketing orders, which establish the minimum prices dairy processors must pay to farmers. The antiquated minimum-pricing order policies were written in the 1930’s and fail to account for the ways that organic milk production differs from conventional dairy farming.
•Congress and the USDA should offer a subsidized insurance program that is customized to the needs of organic dairy farmers. Insurance programs proposed in Farm Bill deliberations are only designed to support conventional dairies.
•Congress should increase funding for organic agriculture programs.
•Congress should fund and the USDA should implement programs that support regional food system development, such as rural development grants.

This modest federal support would help organic dairy farmers who are already contributing to and stabilizing regional economies, and support farmers who want to transition to organic farming.

“More and more consumers across the country are choosing organic milk, but Washington hasn’t gotten the message,” said O’Hara. “Investing in organic dairy production would pay off in multiple ways by keeping small farm businesses afloat, promoting local economic growth, reducing farm pollution, and meeting growing consumer demand.”

Learn more about “Cream of the Crop” and get the inside scoop from organic dairy farmers in the Northeast and Upper Midwest.

The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.