Hood and the two other big processors, Horizon Organic and Organic Valley, say cutting contracts, pay and production are necessary to absorb overproduction and offset softening demand. Organic Valley, a nationwide cooperative, told Maine organic dairy farmers last month that its sales growth had dropped to near zero from about 20 percent six months ago.Ouch.
"Our inventory is overstocked," said John B. Cleary, the cooperative's New England regional pool coordinator.
For many farmers, the changes coincide with crushing debt resulting from the cost of turning organic, which can run hundreds of thousands of dollars. In addition, the price of organic feed has doubled in the last year. Credit has dried up for some, and others say it is nearly impossible to sell cows and so thin their herds.
The Bangor Daily News had coverage of this issue beginning in early March, HERE. See also, HERE for some updated stories from earlier this spring.
We still buy the stuff. The product is notably better than conventional milk in every way. But it sure isn't like a few years ago when it was actually hard to find organic milk in stock.
This is a lesson about boom-bust cycles. Marx would analyze it in terms of an "epidemic of over-production" and a crisis of capitalism.
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