Posted: Monday, March 18, 2013 10:24 AM
By JOHN O'CONNELL
BANIDA, Idaho -- Mike Geddes milks about 80 cows at his southeast Idaho dairy farm, no more than when his father started the business in 1970.
He believes he's maintained a viable operation without having to grow because of a change he made about seven years ago. Neighboring dairies, seeking to increase volumes to land a contract with Wisconsin-based Organic Valley, convinced Geddes to switch to organic production.
When he first started, organic milk prices were healthy, fetching about $5 to $6 per hundredweight more than conventional milk. A few years later, however, the recession brought organic prices close to conventional, and buyers, forced to sell excess organic milk through conventional channels, asked organic producers to curb production.
The organic milk market began improving about two years ago. Organic prices this year have been averaging about $7 per hundredweight more than conventional milk, and buyers have allowed their producers to significantly grow their herds.
"I like the fact that we'll get together and control our surplus if we have to," said Geddes, who sees no reason to grow beyond his current size. "The conventional industry has talked about doing that since I was a little kid."
Geddes said organic production requires "tons of paperwork," and conventional producers get better yields, but the method fits into his philosophy of not overworking the cows.
"I think the simpler operations are a better fit for it," Geddes said.
Though he produces much of his own organic hay and barley, organic feed supplies haven't kept pace with demand, driving prices up.
Brandon Lamb, organic program manager with the Idaho State Department of Agriculture, said Idaho has 14 certified organic dairies, most of which sell to two major cooperatives, Horizon Organic and Organic Valley.
Lamb said organic cooperatives have been relaxing production quotas as the market has strengthened.
"Over the past two years, (organic) dairies have been allowed to produce more cows and milk within their own cooperative," Lamb said. "Some that had 250 animals have now been brought up to just under 500."
Lamb said entering the business can be challenging as dairies must find a buyer. The sole Idaho dairy to be added to the organic list in the past three years is operated by Peter Deelstra, of Wendell. He made the switch from conventional last May and sells to Sierra Organic, based in Southern California.
"The most important thing is stability," Deelstra said. "It's still a growing market."
Deelstra estimates his production has declined by just under a quarter since he made the switch, and sourcing feed has been a challenge.
"Certain things are really different. You can't just order a load of canola, for example. You've got to give somebody two to three weeks notice," Deelstra said. "It's not for everybody."