Organic Valley bans raw milk sellers- Time for a boycott?

[Wifezilla]

"In order to keep supply and demand in balance, Organic Valley has in the past maintained a reserve pool of non-member, waiting list farmers who sell organic milk to the co-op when demand outstrips supply. Organic Valley’s reserve pool policy is being revisited and revised. Organic Valley also processes some fluid milk into dried milk powder when supply exceeds market demand."

"The organic dairy sector has been hit hard by the current economic recession. Organic Valley has responded to weakening markets in a variety of ways. It has reduced both pay prices and production levels for all of its dairy farmer members rather than drop the farmers with least seniority, or those in specific regions. Excess milk is sold to the conventional market."
http://www.cias.wisc.edu/economics/...-case-study-organic-valley-research-brief-80/

"While the economic situation is creating hardship for everyone, organic dairy farmers are particularly vulnerable to the changes in the price they get paid for their milk. The majority of organic dairies are family owned operations that rely primarily on income from selling their milk wholesale. Since 2001, the average price paid to farmers for their organic milk has increased by only 29% while operational costs have increased by at least 50%.(2) By any measurement, whether they are for soft costs (insurance, living expenses) or production costs, this does not represent an adequate return for the skilled labor and capital investment of organic dairy producers or leave any money to maintain their property, or build a "rainy day fund."(2) Now that HP Hood and Organic Valley are lowering the price they pay to farmers, it affects the bottom line of their business by an average of $8,000 annually, lowering their family income by the same amount or an average of a 20% wage cut. While most companies would be grateful for a 10% growth in this economy, some organic dairy companies are taking the short term outlook and firing their farmers or cutting their wages by 20%.

"I have no financial cushion," says Maine organic dairy farmer Steve Morrison. "That loss of income from a reduction of my pay price means that my net income is decreased by the full amount as there is no way I can cut my other expenses."

Processors have been pushing organic dairy farmers to produce more low cost milk based on using pasture and their own forage. They are now telling producers to cut production by 10-15% and that they can't deal with the "spring flush" of milk from those farms that have expanded their use of pasture. The many mixed messages suggesting that farmers either reduce costs or lower their pay price is causing enough uncertainty that the next generation of organic farmers are questioning the long-term viability of organic dairy."
http://www.redorbit.com/news/busine...nic_valley_cut_organic_family_farmers_income/

"Today, a gallon of organic milk is $6 and conventional milk is $3.50. But the organic dairy model has also changed. It had been regional with lots of dairies filling the shelves of co-ops. Today, three companies dominate the market: Horizon Organic, Organic Valley and HP Hood.

Maltby said those companies signed on a lot of producers and asked them to increase production. Now, most companies are trying to cut back.

"And in a lot of cases they have taken what was a three-year contract and asked the farmers to accept an amendment to the contract that reduces what they are going to get paid," he said. "And then Hood is dictating the price on a month to month basis."

Maltby and others say Hood isn't the only company that's cut prices. Horizon has, too, and Organic Valley has limited the amount of milk it will accept from producers. Farmers who spoke privately with MPR confirmed that they'd taken a pay cut and sometimes lost contracts entirely."
http://minnesota.publicradio.org/display/web/2009/07/14/organic_dairy/

Ok...so the economy tanked. Farmers were asked to reduce output. Some sold raw milk directly to customers to make up for their lost income...and OV is clamping down on farmers trying to survive? Did I get this right? Does this sound like 'supporting small farmers' or 'economic justice'??

 

[dancingbear]

Quote:
That's true, but leaves out an important fact. The strain of e-coli that is so dangerous is acid-resistant e-coli, and it occurs in grain-fed cows in feed lots, not in grass-fed cows. In fact, when grain fed cows are returned to pasture and only consume grass, the acid resistant e-coli clears from their bodies in a couple of weeks, and the bacteria in the digestive tract returns to normal.

I'm emailing OV that I, too, will be boycotting their products in response to the raw milk restriction.

I can't buy or sell raw milk at all in my state, a deplorable situation that I'd like to see changed. I hope to be sharing a cow with a neighbor in the next year or two, though, and so finally be able to get raw milk again.

 

[vfem]

Glad to hear you are fighting for Raw Milk in your state, Dancing! That is an important step too.

 

[dancingbear]

I just sent this to Jamie of OV:

"Hi Jamie, I just wanted to let you know that I too, will no longer be buying OV products, due to the coop's decision to restrict off the farm sales of raw milk. I don't believe for one second that this decision has anything to do with the hood of the farmers, only with increased profits for the coop.

Unfortunately it also restricts consumers' choices, by making it even harder to get raw milk. Our choices in most parts of this supposedly free country are already absurdly restricted, solely for the benefit of large corporations. Evidently, OV has chosen to become one of them, like Monsanto. I do not agree that you have the right to tell me, or anybody else, what we can and cannot consume. It saddens me to think OV has sold out."

And just now saw my typo, hood instead of good. Oh well.

 

[Wifezilla]

"George Siemon, Organic Valley’s CEO, writes on his blog that the record drop in conventional milk prices has increased the price consumers pay for organic milk to nearly three times that of conventional milk. Siemon estimates that the greater than usual disparity in retail prices between conventional and organic milk will reduce sales of organic milk by as much as 5 percent.

Organic milk producers are looking at a situation similar to that faced by conventional dairy farmers earlier this year, an oversupply of milk, although for different reasons.

As a co-op, Organic Valley’s course of action, which Bamsen says was driven largely by its member farmers, is to reduce the supply of organic milk by 7 percent. For Organic Valley, the move—which means asking all its member dairy farmers to make mandatory cuts—is unprecedented. In order for the co-op to keep the price it pays its dairy farmers stable, “it’s necessary to drop production,” notes Bamsen. By bringing the supply of organic milk in line with demand, Organic Valley's dairy farmers will presumably avoid milking their cows at a loss."
http://nwpublicmedia.typepad.com/ou...10000-cows-on-two-farms-in-jerome-county.html

" Faced with overproduction of organic milk when demand fell as a result of the recession Organic Valley, an organic cooperative, instructed its members to reduce production, Forgues, of Alburgh, who is on the Organic Valley board, said.

Without that reduction the cooperative would have lost millions in July, according to Forgues, who cited Organic Valley’s experience as evidence that supply management can work.

“We have supply control right now, and it’s harsh and it’s cruel,” Wellington said, referring to the way low prices drive farmers out of business during periods of oversupply."
http://webcache.googleusercontent.c...ction&cd=28&hl=en&ct=clnk&gl=us&client=safari

"Organic Valley/CROPP Cooperative

Organic Valley/CROPP Cooperative (OV) has dropped it’s pay price by $1 in February and another $1 from May to July reinstating the dollar for August milk. They have introduced a quota program to start July 1 2009 which is scheduled to end on January 31, 2010, unless extended by the Board of Directors. In the week before it is to be introduced, there are still many details about the program that are not clear. It is not clear what ”future market conditions” will determine whether the program will be extended.’ If it is extended OV will use the 2009 active base to determine future production levels. The permanency of the program will impact whether producers will need to appeal their active base to protect future production. There is also concern that if the active base is refigured each year based on a three year history, then the active base will slowly erode. As producers for OV are committed to market all of their product with OV, OV is requesting that producers not sell product through other markets, so no raw milk sales.There is a lack of clarity around how transparent the process of granting appeals will be and whether the reasoning for granting an appeal will be posted for other producer owners to see. The appeal form asks for information on the quality of the milk, recent reasons for expansion, the number of cows and acreage, and shifts in production.

Over-quota milk will have a $15 pay deduction from the producers’ mailbox price. The “mailbox price” is defined as the net price received by dairy farmers for milk, including all payments received for milk sold and deducting costs associated with marketing the milk. Historically, milk that OV could not sell organic has been redirected to the conventional market and the same holds true today. OV will be taking any surplus milk and “reblending” it; therefore being a cooperative, they have no FMMO restrictions on how much they pay producers. OV’s letter to producers clearly states that if too many producers appeal it will have an adverse effect on everyone.. Similarly to the other companies, OV continues to implement cost-savings measures throughout the business on an on-going basis. To quote an OV producer “we are solving problems as we move forward.”"
http://www.nodpa.com/payprice_support_control_070109.shtml

 

[Katy]

wifezilla:Farming is an up and down business whether you're a grain farmer or a dairyman. Unless you have found a niche market all of us are at the mercy of the market. Unfortunately for the farmers selling off farm the niche they found was in violation of their business contract with the coop. There have been plenty of years it would have been nice to only have an $8000 dollar pay cut. There have been years when our input costs are not covered by the price we recieve for our grains. It is a part of it......you have to plan accordingly and save for the time you don't have a decent price or crop.

dancingbear.....The decision will only affect the consumer if the farmers who were not abiding by their contract decide to be in compliance with it. I would think some will do that and others will not....that will be their individual choice.

dancingbear.....the coop is the farmer so an increase in profit benefits all the farmers that belong to it.

 

[Nava]

i'm joining the boycott too.

 

[Cindiloohoo]

So if OV dropped their price on the farmers and dropped production....my only question is what did OV expect them to do? They would then HAVE to sell some off farm in order to not have to toss it right? OV sounds a bit bossy. I'm not a customer myself, but I agree with those of you who are and are peeved at them. I would be too!!


JaimeOV...my suggestion to you, might as well just apologize, and see what can be done about reversing the decision. It looks like you have a lot of customers very very angry and will lose more money than you would ever lose on off-farm RAW sales. Just sayin...BYC'ers are nobody to mess with. Too many of them blog and actually know what they are talking about! You really don't want that to contend with from here on out. They'll knock a dent in ye olde corporate wallet

Just friendly advice...take it or leave it.

 

[Tala]

You know, the Organic Valley whole milk is the absolute best thing we can buy here (no source for raw milk) and we travel extra miles and pay out the wazooo to get it......
We don't buy a lot of their milk because it's so popular that unless you get there on truck day the store is likely to run out. We aren't big spenders because it's hit or miss whether or not the store even has stock when we have money, but I just don't know that I could in good conscience go OUT OF MY WAY to purchase their milk anymore. It's a shame really.

 

[Wifezilla]

That's why we are posting about this. Obviously the board was divided. Time for the public to weight in. A majority of the public seems to agree with me that this STINKS!