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Organic milk: Consumers want more, farmers make less

Published On: Jan 09 2012 08:47:22 PM CST   Updated On: Jan 09 2012 08:53:52 PM CST

WESTBY, Wis. -- More and more people are choosing to buy organic milk, but lately organic dairy farmers can't keep up with the demand. That's leading to a nationwide shortage of organic milk.

It's not just that more organic milk is flying off the shelves, it's that there's less of it being put on those shelves in the first place. Many farmers are producing less, and that means prices could go up.

Darin Von Ruden has been an organic dairy farmer for four years. But right now, his organic milk production is at the lowest it's ever been.

"I'm back about 10 percent of what I was last year," said Von Ruden.

The organic hay and corn these cows eat are significantly more expensive this year than they were last year. That means Von Ruden has to feed them less.

"You don't like to do it, just because it's one of those things that-- in order to be profitable, you should be getting maximum production all the time. But if you're going to be sticking more dollars into the feed than what you can get back, you almost have to cut back in order to stay in the black so that you're making money," said Von Ruden.

He says the organic corn his cows eat costs about two-and-a-half times the price of regular corn. A ton of organic hay is 20 to 30 dollars higher than it was last year.

Since the cows are eating less now to save money, they're also producing less milk. In the meantime, demand for their milk is on the rise.

"Within the last year or two, we've sold so much more organic milk than conventional. And we didn't think that would ever happen.... And even during the recession, organics, the sale did not stagnate, they rose-- granted, more slowly. And I think people are willing to pay somewhat of a premium to get them," said People’s Food Co-Op Marketing Manager Lauri Hoff.

Von Ruden hopes she's right because it's likely organic dairy farmers will raise their prices when their current contracts come to an end.

"Currently, a lot of organic producers have contracts with their processors. And they're set at a level for a year, most of the time. And a lot of those contracts will be coming up here in March, April, May. And when those contracts get renewed, the processes will take into account this rise in prices that farmers are facing," said Von Ruden.

The organic dairy cows may not be eating as much, but don't worry. They're not going hungry. With less food, they just have less energy going into their diet, which means they don't have the capacity to produce as much milk as they would with higher energy levels.