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For further details of what is happening and some charts, please go: feed_payprice_update_07262016.shtml Data published by the USDA AMS continues to show slight reduction in retail sales of organic non-fat fluid milk for November and December, 2015, and a small increase in sales of full fat and 2% fluid milk compared to 2014. Non-fat and Reduced Fat organic milk utilization only increased marginally by less than 1%.The only Federal Milk Marketing Order to publish data on organic utilization is Order 1 (Northeast) and their data show that utilization of organic whole milk had increased by 20% to 13,659,363 lbs. There is no tracking of the increasing sales of grass-fed milk, and now certified organic grass-fed milk, both retail and manufacturing.Producers are exercising their right to move their supply to other companies with the increase in competition across the Midwest and the Northeast.Those looking for an easier entry into a value added market are looking at the grass-fed market demand, whether it is an entry to organic or not.With the price of conventional milk projected to stay low because of the decrease in exports and without any grant based federal safety net, many small to mid-size dairy operations are looking at different options to stay in business.
The EU farmgate price is approximately .50 per 100 lbs. Comparatively, retail prices in the EU are lower by about 35%.
Manufacturers that require organic dairy ingredient are looking to source their own supply, and we have the brand leader of organic milk (White Wave/Horizon) being acquired by the brand leader of organic yogurt (Danone/ Stonyfield).
The number of buyers of organic milk is shrinking rapidly and any leverage to affect their pay price that producers may have had in the past has disappeared.
While retail fluid sales have declined, the retail price has increased and there are still shortages on supermarket shelves.
The drop in sales can be attributed to a shortage of supply and milk being diverted to manufacturing as demand for the higher margin organic dairy non-fluid products is increasing.