DIETRICH, Idaho — Ben Pulsipher was managing a 2,000-cow conventional dairy in Raft River when he decided it was time to start his own operation.
With conventional dairies struggling to cope with low milk prices, Pulsipher reasoned the organic price premium would make it economical for him to start with a small herd and gradually grow.
A few months since entering the organic industry, Pulsipher said his contract still justifies the extra hassle, but he’s begun to worry too many other Idaho producers have reached the same conclusion and may be gradually flooding the niche market.
He and his partner, Evan Israelson, sell milk to Sorrento Lactalis in Nampa for organic string cheese production, operating as Anhder Organic Family Dairy, LLC. They bought their dairy, which switched to organic production under the previous owner last November, in May and milk 200 cows.
“We couldn’t afford to start off a 2,000-cow dairy, or even a 500-cow dairy. In order to compete in the conventional market you’ve got to be big,” Pulsipher said.
While organic certification has provided the partners stability in an otherwise tumultuous dairy sector, organic production comes with its own challenges — and higher input costs. Ground must be three years removed from conventional production and livestock must be transitioned for a year to be certified. Organic hay and forage is costly. Pulsipher said the cows must be allowed to graze, which tends to decrease milk production. Furthermore, there’s more paperwork, and producers face a yearly audit.
Nonetheless, Idaho State Department of Agriculture Organic Program Manager Johanna Phillips said growth in the category has been so rapid lately, the state started tracking the number of inquiries from producers seeking to enter the organic sector in 2015. That year, ISDA fielded a whopping 120 inquiries. This year, the agency has already handled 115 inquiries.
Phillips said Idaho’s total certified organic acreage jumped nearly 15 percent from about 185,600 acres in 2014 to 213,000 acres in 2015. Organic hay acres increased about 33 percent in 2015 to nearly 40,000 acres.
ISDA also been busy certifying organic dairies, adding 11 in 2014, 16 in 2015, and 20 thus far in 2016. The number of organic milk cows rose from 5,967 in 2014 to 18,357 in 2015.
Phillips said ISDA’s organic program has “not previously had this level of interest,” but she noted Idaho still has a small percentage of organic acreage relative to other states.
“I would say there’s certainly room for growth in Idaho and the consumer demand continues to outstrip production, and that bodes well for the market,” Phillips said.
But Pulsipher has his doubts, based on the organic growth trend and evidence of diminishing growth in demand.
“This year I was told 3 percent growth in organic sales over last year, but last year everybody you talked to thought it was going to grow leaps and bound,” Pulsipher said. “I think the pool is getting too crowded.”
Jay Byrne, who tracks agricultural trends with the consulting firm v-Fluence, shares Pulsipher’s assessment. Byrne said large companies have bought into the organic market based on expectations of “meteoric” growth that isn’t materializing.
“I don’t know how the demand can keep pace with the expected growth investors want,” Byrne said.