Organic dairy farmers hit by California drought

Sound Consumer | May 2014

San Joaquin Valley organic dairy farmer Tony Azevedo's business has dried up — literally. Because of the record-breaking California drought, he has nothing to feed his cows except what he has stored, and he expects that will be gone in about 100 days. "It's a desert out here," he says.

With their pastures barren, California organic cattle and dairy farmers either are spending thousands of dollars to truck in supplemental organic feed from faraway states, or, like Azevedo, looking at bowing out of farming altogether. In some cases, operating costs have tripled. February and March rains weren't enough to alleviate the worst drought since the state started keeping records in 1849.

So will organic food prices jump in response? "Right now supplies are steady," says Louise Hamstead, chief operating officer at Organic Valley, a cooperative that's the nation's third-largest buyer of organic milk. "But that could change once temperatures start to rise."

If the drought persists, consumers in some parts of the country may find shortages of organic milk at the grocery store, Hamstead said. Organic livestock farmers are in a unique bind in this drought, because to qualify as organic meat or milk under U.S. Department of Agriculture (USDA) regulations, cows must eat only organically produced feed. They also must graze their animals on pasture at least 120 days a year — a requirement absent in conventional dairy operations.

With pastures drying up and organic feed costs skyrocketing, organic farmers in California are facing tough choices.

This year, with those pastures dry, organic livestock are consuming about 90 percent hay — at a steep cost.

Even under normal conditions, organic hay is more expensive and often hard to find. With grain growers across the United States planting corn for ethanol, instead of hay for animals, supplies are tight. The drought makes matters much worse.

Darrel Wood of the organic grass-fed beef company, Panorama Meats, in Vina, California, said he recently ordered a truckload of organic hay from Montana to his ranch in the Sacramento Valley, 1,000 miles away. It was the closest shipment he could find. He'll write a check for $350 per ton when it arrives, instead of the $200 to $250 a ton it cost last year.

Clint Victorine, owner of Eel River Organic Beef, based in Humboldt County and sold at PCC, said that before the drought, it cost about 60 cents in feed and labor to produce a pound of meat. Today, those costs have doubled. He'll try and make some of that back by raising his organic meat prices 8 percent.

In response to these drought conditions, organic farmers are seeking a variance in USDA's pasture requirements for organic cows. In past droughts, USDA's National Organic Program temporarily has lowered the minimum number of days an animal has to spend on pasture and cut the required amount of dry matter, such as hay, in their diet. The variance would help California producers — who manage 13.2 percent of the country's organic livestock? — to preserve their organic certification.

"Two California-based certifying agents requested variance from pasture requirements due to the severe drought," said Miles McEvoy, deputy administrator for the National Organic Program. USDA granted the variance for many California counties.

Despite ranchers and dairy owners buckling under high feed costs, a USDA spokesperson doesn't think consumers will feel the effects of California's drought on their wallets. The impact on organic food prices will be "relatively small," the agency rep predicts.

Mark Kastel of the Cornucopia Institute agrees. He believes farms will go under well before consumers pay more for organic milk or meat. This may be true especially in the organic dairy industry, where few producers sell under their own label and have no control over the selling price.

Meanwhile, organic farmers are liquidating their herds. Independently owned dairies are selling their cows for hamburger meat or as milk cows to large conventional operations. "Some of the big dairies have enough of a war chest stored up that they can beat the smaller guys to all the feed," says Kastel.

The national beef herd size is already at a 61-year low after years of drought and extreme cold in different parts of the country. Beef supplies are tight and prices at record highs.

But at Panorama Meats, Wood is pressing ahead and hopes his customers will understand a 20-percent price hike: "Every pound of ground beef and every steak they purchase keeps a family ranch in business," he said.

A version of this article was produced by the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture and environmental health.

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