It can be hellish being a dairy farmer. Increased productivity can translate not into financial bounty but a financial setback if the market is flooded with product and demand isn't there. Prices drop, if not plunge.
"Historically, dairy farmers are price-takers, not price-makers," says Mark Kastel of the Cornucopia Institute. "Conventional farmers work their asses off, milking their cows seven days a week, and put their assets at risk, and the month after they ship their milk to the dairy they find out what they're going to get paid."
The Organic Valley co-op has reversed the dynamic. Balancing expected organic milk production with expected consumer demand, the co-op's farmer-run board has been able to guarantee its members a stable "pay-price" throughout the year that reflects their expenses and profit needs.
"When you go to the mailbox, you know you're getting $22 per hundred-weight [about 11 gallons] for your milk whether it's January, July or November," says the co-op's Louise Hemstead.
Milk is the co-op's sales leader.
"The growth in milk has been faster than other products, in part, because of the concerns of parents," says Phil Howard, a rural sociologist at Michigan State. "They're thinking: 'What are we putting in our children's bodies?' A lot of parents are concerned about growth hormones, pesticide residues, antibiotics. Those are the reasons they buy organic dairy."
