Organic Dairy

Final Report for FNC01-356

Project Type: Farmer/Rancher
Funds awarded in 2001: $11,700.00
Projected End Date: 12/31/2005
Matching Non-Federal Funds: $17,122.00
Region: North Central
State: Michigan
Project Coordinator:
Chuck Oliver
Oliver Farm
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Project Information


Oliver Farms is a 600-acre, 50-cow dairy farm that has always pastured their cows and raised corn, small grains, and alfalfa for feed and for a cash crop.

Before receiving this grant, milk was shipped to the conventional market (DFA-Dairy Farmers of America) and the farm was in transition to organic.

After receiving this grant, the farm has been certified organic, pastures are more intensively managed, farm fields are regularly soil tested (lime and compost are applied), milk is being processed into cheese on the farm and 300 families are established as “cow share” owners which entitles them to get fresh milk at the new on-farm store.

Brian Koenigsknecht, whose 200-acre farm was certified organic but was shipping milk conventionally to Muskegon Milk, has now converted his dairy to organic, is purchasing needed grains, is doing intensive grazing and is shipping organic milk out of state.

Joe Golimbeski has a 400-acre Organic Crop Improvement Association (OCIA) certified farm, and an 80-cow diversified dairy that was shipping conventional milk, but is now shipping organic milk and using intensive grazing. He has built another milk house to do a next step, which will be processing fresh milk or processing organic milk.

Harley Thomas has a 70-acre certified organic pasture-based Jersey dairy. He was shipping milk conventionally before being involved with the Dairy Group. After being involved, he has shipped organic milk out of state and currently is processing pastured cream line milk on the farm that he markets regionally.

Joe Scrimger, who helped put this project together, is the owner of Bio-Systems and Scrimger Farm, a 198-acre certified organic grain and beef farm. After the grant, Scrimger Farm is downsizing to 100 acres to focus on pastured animals and a Community Supported Agriculture (CSA) vegetable/fruit project.

Bio-Systems is promoting more pasture based animal systems to its customers who are based in Michigan and Ontario, along with including “Pasture Systems” and the value of local/regional food in their educational programs.

Goal: To effectively move more small dairies into the organic/BST-free/chemical-free market to improve the economic basis of the farms.

Our education component involved getting dairy farmers together in meetings to share with them the changing market demand for organic/BST-free milk, and educating the producers on the production practices – from the soil up – to make this a successful program.

Meetings were conducted on herd health (Jerry Burnitti – Agri Dynamics), milk processing equipment (Pladot Mini Dairy), and the value of CLA and omega 3 oils from pastured systems (Dr. Dhiman – Utah State University). Tours were made of an intensive grazing operation (Koenigsknecht Farm), an on-farm dairy processing operation (Crooked Creek Dairy & Shelter Dairy), and a commercial dairy (Guernsey Dairy Farm).

Two representatives of the group toured Ohio Dairy processing plants and reported back to the group. Hartzler Dairy’s milk and ice cream along with identified (organic and BST free) milk and cheese demands were noted to the group.

At our dairy health meeting, representatives from Healthy Traditions Network (HTN), a consumer group from Detroit, and a chapter of the Weston A. Price Foundation (WAPF) attended and became involved with the group.

Michigan State University (MSU) was involved through Michigan Organic Food & Farm Alliance (MOFFA) with board members, Dr. George Bird and Jim Bingen, who have continued their contacts with members of the group. Dan Rossman (MSU Extension from Ithaca, Michigan), also helped us line up speakers from MSU and has become much more involved with the whole organic farming process.

Overall, our results were successful with the exception of not completing a business plan for the group to act as a processing entity to put Michigan Organic milk into the Michigan. To counter this, the fresh (raw) milk is now moving from five farms across the state (Oliver, Yoder, Hicks, Millers and Warnakies) in Cow Share or Cow Boarding programs. The return to the farm in this model is more than a processing plant would return. These farms are getting around $45.00 per hundredweight for their milk. Most are also selling meat and other items from the farm to their cow share customers.

Five farms (Yoder, Koenigsknecht, Golimbeski, Cordes and Schniders) that were not producing organic milk before the project are now shipping organic milk out of state. Because the price for shipping organic milk increased from $19 per hundredweight to $22 to $25 per hundredweight while the project was in process, these farms were satisfied with this price versus investing more in a processing process to gain more market share.

Early on in the project, soil biology tests and mineral tests were a focus and directions were established in respect to soil building. Calcium, phosphate, trace minerals along with bacterial and fungal organisms have become more important to the farms in their management plans. But marketing was still the main focus since the dairies needed to generate funds to go back and address the soil conditions. Because most of the farms were limited on budget when working with the conventional market, soil amendments were not able to be applied in a way that was desired. Most of the group members are now putting a long term emphasis on soil nutrition that will lead to better animal health, and since budgets are now improving, the group members can accomplish these goals.

Milk production has been diverse in the group, with the Koenigsknecht Farm leading the way with the best soil balance and the most production (70 lbs per Cow) with 15 lbs of grain per day. Others vary from 15 lbs of grain to no grain and their production runs from 40 to 60 lbs of milk per cow per day. This is below the conventional production average, but cow life is much longer at over 10 years per cow average versus less than four years for the average cow in the conventional market. Because of the marketable value of the extra cows and heifers that a grazing organic farm has, they are making up for lower production levels with more replacement animal sales versus purchases, and they have less per animal cost in respect to grain and housing.

We learned that the organic market is actually stronger than most people thought that it was when we started. When there are spot shortages of milk in the current market, a producer could receive $30 (+) per 100 lbs of milk just to ship milk out of state. Our target was to get $35 per 100 lbs to the farm after they invested in a processing plant and the current market didn’t justify this happening.

The main barrier we had to overcome was with the fresh or raw milk. With the help of HTN and the WAPF we challenged the state on the fresh milk issue and the state has changed their approach to the farms that are doing cow share contracts. A letter was sent to all dairy farms in the state from Oliver Farms on this issue.

The fresh (raw) milk project turned into a better economic return than a processing plant could have done for us, but not all farms can do fresh milk or deal directly with the customers.

We have very good models that have come out of this project to share with other producers and we are very positive about what has been learned.

The economic impact, although not quite as widespread as we had planned, is showing more return in the fresh milk area and a very good return (better than expected) for shipping out of state. The goal of returning to our community $475,000 has been met with our seven farms. More family and off-farm labor have been able to return to the farm versus the conventional model of labor leaving on a per cow basis. The farms have not had to get larger and some have decreased in cow numbers (Oliver and Miller) while showing more income.

Outreach was accomplished at the Northern Michigan Small Farm Program, three years in a row. Farm Bureau and Cooperative Extension are involved with this program. Oliver Farm has completed four tours and two milk give away promotional events at the farm. The Miller Farm also had a threshing bee at the farm to introduce their cow share program to the public. Koenigsknecht Farm hosted an all-day tour and an organic lunch after they started shipping organic milk from their pastured-based dairy. The cow share program is bringing many consumers to the farm and word of their success is spreading.

HTN’s Growing Connections Harvest Festival held in the Detroit area is currently one of the largest organic consumer events in the region at over 1,500 people. The dairy group is represented with three booths of farmers (Yoder, Oliver and Waranke) marketing cow share or animal products. Bio-Systems has also been asked to present at this program on the health benefits of organic production. MSU, OGM, MOFFA, 4-H groups and National Honors Society groups are all involved with this program.

Oliver Farm and Bio-Systems are still being asked to do dairy programs across the state. This week (2/28/06) they will make a presentation to the Amish in Mio, Michigan and at the MSU Organic Program.


Participation Summary
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.