ORGANIC DAIRY FARM PROFITABILITY RESEARCH
Kauppila, D.M.1; Parsons, R.L.2; Rogers, G.F.31Farm Business Management Regional Specialist, University of Vermont Extension, St Johnsbury, VT, 05821
2Extension Economist, University of Vermont Extension, Burlington, VT, 05405
3Farm Business Management Regional Specialist, University of Vermont Extension, St Albans, VT, 05478
Abstract:
ORGANIC DAIRY FARM PROFITABILITY RESEARCH
Organic dairy farming was growing quickly in Vermont and the Northeast. As farmers were making the transition to organic, there was scant research on the profitability of organic dairy farming. UVM Extension received funding from USDA and Hatch to conduct research in Vermont, and with cooperators in Maine. UVM Extension agents and NOFA-VT field reps have visited from 28-44 Vermont farms each year from 2004 to 2009. Our research showed that the on-farm price of milk was not sufficient to pay the bills and provide family living costs in 2004-05. Farmers used this information to receive a higher price for their milk in 2006. Many farmers switched to organic in order to avoid the large swings in conventional milk prices from year to year. Organic dairies receive a contracted price, with quality incentives. In the 5 years from 2004-09, organic dairy farmers saw much better returns than conventional dairies in 2 of the years, about the same returns in one year, not as good a return in 2 of the years. 93% of the farmers were satisfied with their decision to switch to organic. Now, with the worldwide recession, organic milk handlers are asking their farmers to cut production to keep supplies in line with demand.