Milk markets are not created equal. Here in Wisconsin, we talk a lot about milk and dairy prices moving on the Chicago Mercantile Exchange or CME. But Wisconsin ranks No. 2 for the most organic dairy farms in the country.
Organic dairy markets don’t follow quite the same market trends as their conventional counterparts, explains Shawna Nelson, executive vice president of membership with Organic Valley.
For starters, organic dairy prices are not set by the CME. Organic dairy farmers likely have a contract with a buyer or belong to a cooperative, such as Organic Valley. That’s who sets the price.
In addition, conventional milk prices follow seasonal trends more so than organic milk. For example, the milk price usually kicks up in the fall as cheese and butter processors need more supply to amp up for the holidays and schools start buying milk again when classes start.
Nelson says that while organic milk follows some of that, it’s primarily driven strictly by consumer demand at the grocery store. For example, the organic marketplace has seen growth since the start of the year by 3.4 percent. Nelson says organic dairy and eggs are up 5.5 percent.
As demand grows, Organic Valley continues to add to its milk supply. The cooperative has brought on more than 100 new farms this year. The cooperative has plans to bring on additional farms for the next three years, as well.
Leave a Reply