Organic dairies surviving on thin margins

Organic dairies surviving on thin margins

Dairy farmers have long struggled with profitability, which has provided the impetus for one of the most rapid consolidations in the history of modern agriculture.  In 1987, the USDA reported that a midsized dairy numbered 80 cows. 

In 2017, that midpoint had grown to 1300 cows. In 1987, there were 146,685 farms with dairy cows. This declined to 47,873 in 2007, and even further in 2007, to 30,373.  Achieving profitability with the smaller herd sizes that are common on organic dairies has become more and more challenging. 

Global dairy giant Danone divested two key organic dairy holdings this year. Horizon Organics and Wallaby Organic in the US were sold to Platinum Equity, as it looked to “prune” its portfolio to boost growth. 

That Horizon and Wallaby weighed down Danone in recent years illustrates the shrinking margins in…

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