By Lani Duke

Vermont’s dairy industry is changing. A report by the Dairy Task Force of the Vermont Department of Agriculture, Food and Markets, released in September, notes that the number of dairy farms in the state has decreased and that more than 120 dairy farms have already been certified organic in the last 10 years.

Demand for organic dairy products is growing each year, to the level that, “in 2005, the Northeast organic milk market was deficient by 10 million pounds of milk per month.” The organic market is growing rapidly now, but it can not continue at its widely estimated 20 percent annual increase, says Bob Parsons, University of Vermont Extension agricultural business management specialist. “Continued growth at 20 percent is not sustainable in any industry. Demand starts leveling out as supply grows.”

Now, organic milk fills the needs of a niche market, but extensive growth in that market “would take fluid milk from the niche market to the commodity market. If it does so, it will be subject to market fluctuations and the price to the farmer will rise and fall with availability and demand.”

Organic milk has already grown to a large enough market segment that it has become a short commodity, Parsons notes. The “mainstreaming” of organic milk production may reduce the ability of New England dairy farmers to be able to compete in a nationwide organic fluid milk market. “The average organic dairy farm in Vermont has been under 50 head, but those numbers are edging up. This year, it seems likely the number will come close to 60 head. They’re too small to be profitable conventional dairy farms.”

Parsons recognizes that the number of small dairy farms that have converted from conventional to organic production is increasing. “Next year, Vermont will have about 200 organic dairies out of the 1150 dairy farms in the state.”

If someone were to believe that all organic milk, with its higher price tag, necessarily comes from small farms, he or she should think again, Parsons cautions. A cow need consume only organic foods for a year to be certified organic. She must be able to go outside where grass could grow, but that does not mean that she eats it.

A large farmer could conceivably maintain more than one herd, Parsons hypothesizes. Milk from the organic cows would bring in a higher price. “If a cow receives antibiotics, she could be moved over to the conventional herd.”

The price for conventionally produced milk has failed to keep pace with other price increases in the world economic fabric, Parsons says. Research has led to corn plants with genetics that result in yields per acre far higher than those of the past and cattle with higher milk yields than those of their ancestors. But the farmer receives no more for his increased efficiency.

The US Department of Agriculture (USDA) contracts with the Northeast Organic Farming Association of Vermont (NOFA-VT), through the sub-organization Vermont Organic Farmers (VOF), to certify Vermont farmers, whether dairy or in some other branch of agricultural production, as organic. VOF figures indicate that, “as of October 1, 2006, there will be 122 dairy farms certified organic” in the state. Another 75 Vermont dairy farms are “in their final 12 months of transition.”

Willie Gibson is one of three individuals employed by VOF to inspect dairy farms and help them transition from conventional to organic dairying. Vermont’s organic dairying industry is “doing exceptionally well,” he says. “So many smaller farms are making or have made the transition to organic production. Vermont farmers, generally, treat their animals well. But it’s not a ‘silver bullet,’” he cautions.

New certification regulations require that farmland not receive pesticides, herbicides, or commercial fertilizer for three years, rather than the previous one-year restriction. “The herd itself transitions in one year,” Gibson says. During that year, its milk is shipped to conventional production facilities, while the cattle themselves eat only organic feed.

Farmers who are transitioning now will receive high prices for their milk, but that may not be true in the eventual future, Gibson projects, noting that even such mainstream stores as Wal-Mart are now touting organic lines. “If you’re in on the beginning, you do well. It will be at least five years before we meet the current demand.”

Diane Bothfeld, senior agricultural development specialist in the state Agency of Agriculture, Food & Markets, promotes switching from conventional to organic milk production as a “viable” enterprise. “The Dairy Technical Assistance Program that Willie Gibson works for provides excellent help for farmers making the transition,” she praises.

Another source of help is the Vermont Organic Transition Loan Program that began this year in October. Farmers may qualify for a loan up to $20,000, without interest or principal payments becoming due until they become organic, she says.

Currently, organic dairy farmers in Vermont and Maine receive nearly $5 more for each 100 pounds of milk they sell, according to a recent research report compiled by University of Vermont and University of Maine Extension personnel. The “representative farm” in that report produced nearly 7,000 hundredweight of milk for an average income of $158,075, but higher feed and additional labor costs tend to offset increases in income. However, organic dairy farmers currently receive nearly twice the hundredweight price that their conventional-production counterparts do, Parsons observes. Profitability, as in other small local businesses, depends on individual business skills, as well as diversification.

Tunbridge dairy farmer Rob Howe, president of the Vermont Organic Milk Producers Association (VOMPA), switched from conventional to organic production early on, 12 years ago, shipping his milk to the Vermont Organic Cow, also of Tunbridge, established by Peter and Bunny Flint on their 400-acre farm in 1990. (The company is now a division of WhiteWave Foods Company, based in Broomfield, CO, which is itself a subsidiary of Dean Foods. This spring, the label dropped its Vermont branding, redesigned to read “The Organic Cow.”)

Howe was already practicing the management techniques that were required of an organic milk producer, and “the green revolution” was underway, he observes. “My father would roll over in his grave to see some of the things I do,” he comments.

For example, he doesn’t use herbicides on his corn, but controls weeds by cultivating. “I get just as good a yield,” he claims, but a close look at his cornfields would reveal “some pigweed, grasses, and clover” growing in with the corn stalks. The result is grain with a higher protein content and free of artificial chemicals.
Many of the farmers who, like Howe, have switched from conventional to organic milk production are in their 40s. Some are “in their retirement years, making the transition because their farms are so small” and they see “economic benefits” to the conversion.

The chief benefit, Howe says, is to be able to sell his milk at a constant price, year round, rather than at whatever price the buyer is willing to offer. “The price is always the same, no fluctuations. You know what you’ll get in return. As long as you can control your expenses, you know what your profit and loss statement will look like.”
Consumers, Howe believes, see a value beyond that of drinking milk from cows who are not ingesting artificial chemicals and hormones in their food or being treated with antibiotics. “Consumers are increasingly willing to pay for organic products. They also see value in a more humanely treated dairy herd.”

Fortunately, Howe was able to find a veterinarian who “believes in homeopathic medicine, acupuncture, and massage,” he says. Some farmers who want to make the switch to organic production may have to change veterinarians, he notes. Howe’s cattle receive no hormones or antibiotics. Instead of antibiotics, he uses aspirin for the fever and swelling of mastitis, and milks out the infected “quarter” by hand every two hours.

The organization that Howe heads up, VOMPA, was created in 1999, to aid organic dairy farmers to share information and experiences, on “maintaining a sustainable organic milk price, to animal health, grazing management, and growing quality feeds.”

Gibson inspected Agnes and George Spaulding’s farm in South Royalton in early May, “walking the whole farm,” as they began their transition from conventional to organic dairying. The Spauldings, who are both “retired,” are milking about 30 cows now and plan to keep their milking herd at about 35 animals. Some 10 acres are in pasture; they raise their own corn silage and a combination of cattle-peas and oats for their livestock. Changes in federal regulations on organic products led them to make the switch to organic production now, while there is only a one-year transition period. Their transition calls for them to feed their cows predominantly organic food (no more than 20 percent can be non-organic), so they can continue to feed “regular cow grain” until February 12.

Milky Way Organic Farm in West Rutland has been “always organic,” says Mary Saceric-Clark, mother of Rob Clark, Jr., the farm operator. Her husband was a conventional dairy farmer who sold his cows some 10 years ago. Their son graduated in 2004 and restarted the dairy as an organic business.

Before the dairy farm could begin organic milk production, the entire barn “had to be put in working order” and a bulk tank had to be installed, she says. The family searched long and hard for cows that were already certified organic. Horizon Organic, the company to which Milky Way sends its milk, and NOFA “gave direction” to the quest, she notes; “we looked into AgriView and the NOFA paper, and called other organic organizations in other states.”

The younger Rob Clark is currently milking 40 cows and raising another 40 head of young stock. In addition to milk production, Milky Way Organic Farm supports another profit center in agritourism and education. “We do a lot of events for kids,” Mary Saceric-Clark notes. “We support an annual fund raiser for the Rutland Area Visiting Nurse Association & Hospice (RAVNAH).”

Farming, in general, and organic farming especially, requires an extra level of commitment to its business ideals. “You have to have love and dedication to make it work,” she says.

Having shipped conventionally produced milk since 1982, Joanne and Edward Eugair of Florence started the transition from conventional to organic dairying in 2002 and became certified in 2003. They were at an advantage because their land was already certifiable, Joanne Eugair says. “We were already using only manure for fertilizer.”

Milking a herd that is approximately three-quarters Ayrshire, one-quarter Jersey, and mixed-breed cows, the Eugairs ship their fluid milk to Horizon Organic. Picked up every other day, it travels to New York, to be mixed with other organic milk, pasteurized, and packaged before it is redistributed across the Northeast.

They own a 55-acre farm and “rent the farm below,” another 55 acres, using the rented barn in which to raise heifers. “We buy a lot of feed and purchase organic hay. We pasture most of the land,” Joanne Eugair describes their family operation, which is their sole source of income.

“Our cows are healthier. We hardly ever need to treat them” for illness. “We haven’t had to trim their hooves. They’ve had no abscesses. And the land has improved too. We’ve always pastured our cattle, but now we’ve intensified rotational grazing. The grasses are better and the weeds are leaving.”

Organic dairy certification recognizes no geographic boundaries. Certified farms in Vermont stretch across the state, from Jonathan and Jayne Chase’s Smuggler’s Hill Farm in Derby Line to Marilyn and Mike Gardner’s Hill Top Farm in Pownal.

Although the state’s organic milk mostly travels outside the state to be processed, that too may change as interest in organic dairy products intensifies. For now, organic milk production, like other organic agricultural enterprises, appears to have a bright future in Vermont.