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.