Since 2005, organic dairy cooperative Organic Valley has had in place a successful forward contract strategy for its members converting a dairy herd to organic.
Through the Organic Transition Premium (OTP) program, Organic Valley offers a fixed price premium during the transition period in return for the commitment from the producer to provide to the cooperative a certain supply for a certain amount of time. Participating producers also are supported with a range of services from Organic Valley during that transition period, including technical assistance on milk and feed quality, the certification process, marketing assistance, and more. Half of Organic Valley’s 1,800 dairy farmer members have taken advantage of the program.
Organic Valley Vice President of Farmer Affairs Travis Forgues says the program is a win-win for all concerned.
“It’s a win for farmers and a win for the cooperative. Our main goal with the OTP program is to support our dairy producers transitioning to organic during a financially vulnerable period when they are practicing organic methods but not certified and commanding the organic premium,” said Forges. “For the cooperative, the premium serves to increase long-term stability in a milk supply once a farm does transition, and gives us an added competitive advantage when we are seeking new farms and milk.”
Forgues says it’s important that organic stakeholders work together to resolve obstacles to the advancement of organic, and to growing more organic grain.
“Organic Valley is a part of the Organic Grain Collaboration because it allows stakeholders a non-competitive atmosphere to collaborate on the structural and production gaps that hinder transition and growth to organic,” he says. “As a livestock-based cooperative, we strive for feed self-sufficiency, but in some instances given the weather or geography, our dairy or poultry farmers buy organic grain. It would be great if those purchases supported our neighbors and more American family farmers.” //