Organic dairy farmers pleaded with state lawmakers in both the Senate and House agriculture committees on Thursday to provide emergency funding during an economic crisis in the industry.
As many as 25 to 30 of the state’s 139 organic dairy farms are at risk of going out of business in the first half of 2023 without “swift and substantial intervention,” Maddie Kempner, policy director with Northeast Organic Farming Association of Vermont, told lawmakers.
The organization, also known as NOFA-VT, certifies organic farms in Vermont. Members testified during a joint hearing between the Senate Agriculture Committee and the House Agriculture, Food Resiliency and Forestry Committee on Thursday alongside the farmers.
Vermont lost 11 organic dairies in 2021 and 18 in 2022, NOFA-VT officials said.
Kempner said farmers are paid less than the cost of milk production by around $9 per hundredweight — the unit for measuring milk, equivalent to 100 pounds of milk.
The organization proposed that lawmakers allocate $9.2 million to organic farms through the budget adjustment act. The payments would be structured so that farms would receive an additional $5 per hundredweight on their 2022 sales.
Organic farmers typically get into the business for two reasons: to participate in a type of farming associated with environmental benefits, such as improved soil health, and to gain a higher pay price. Organic farmers don’t typically need the same kinds of safety nets required by many conventional farms. But that’s changing, Kempner said.
For years, organic dairy farmers’ costs of producing milk have risen while their pay prices have declined, due largely to a “get big or get out” dynamic that resulted when larger farms obtained organic certifications through loopholes in the National Organic Program, a federal regulatory program that sets and enforces organic standards. In recent months, the combination of inflation, drought and disruptions to feed supply due to the Russian invasion of Ukraine have made the economic conditions untenable, NOFA-VT officials said.
Even when prices on the grocery store shelf increase, retailers and distributors often absorb the difference, and farms don’t typically see an increase, according to Jen Miller, farmer services director at NOFA-VT.
Sen. Bobby Starr, D-Essex/Orleans, asked the farm group’s representatives about a pot of money that the state’s Agency of Agriculture, Food and Markets recently allocated for organic dairy farmers. Kempner responded that the money — $200,000 in grants — was directed toward farmers left behind when Horizon Organic exited the region, leaving 28 of Vermont’s farmers with nowhere to sell their milk.
The money is “orders of magnitude less than what the needs are out there on the ground right now,” she said.
Now, the farmers who formerly sold to Horizon — who believed they had a safety net with Organic Valley — join the other organic dairy farms that are experiencing the financial crisis.
“It’s frankly a really tragic irony that Organic Valley, in particular, was able to pick up the majority of those farms dropped by Horizon, and now is not able to provide even close to a sustainable pay price to their producers,” she said. “Those funds did help those producers in that moment be picked up by another buyer, but unfortunately, now those same farms find themselves in this really desperate financial situation.”