There seems to be an increased interest in 100% grassfed dairy products out there in the marketplace. The food products that come from animals raised on grass are said to have a higher nutritional value (click here for more information http://www.eatwild.com/healthbenefits.htm).  Eggs, meat and dairy are the main areas of focus for farmers trying to produce higher quality food.  The biggest impediment for increased production is (a) knowledge on how to do it, (b) available markets that pay enough to warrant the increased labor (c) enough land to scale the enterprises.

Grassfed dairy products are much harder to profit by than meat or eggs due to the increased complexity in production and marketing. Interest of 100% grassfed raw milk are on the rise (but a very very very small percentage of the total milk that is produced out in the marketplace). Raw milk grassfed cheese and butter are  more feasible due to the storability of the product — butter can be frozen and cheese can be aged.  The biggest issues that grass-based dairymen face is marketing and useage – typically the volume of milk from a grass-based dairy is highest in the spring and early summer, and lowest in the late fall and winter (the typical reality of when grass is growing). The problem with this is the processors that buy the milk from these dairies have a glut of milk in April, May, June and part of July — right when school lets out. School lunch milk makes up a significant portion of milk useage. Also, consumption of bottled milk falls in the summer. Whereas non-organic milk makes up the bulk of school lunch dairy, this phenomenon effects all dairy – especially fluid milk.

So what you have is all this milk right when the processor and marketer doesn’t need it. To compound matters worse, people actually like to drink milk year round. They may drink more in the winter, but by in large not having milk available all the time is a very bad play for marketers. Grassfed dairies typically either stop producing milk or reducing the volume dramatically in the winter. This just does not work — processors, stores, marketers and consumers want what they want, and they want it all  the time.  Just like people want tomatoes and bananas all the time.

What can be done? In my thinking, 100% grassfed bottled milk is not feasible now, not until the mainstream consumer dramatically changes their eating habits. When you see Wal-Mart doing anything, believe that the groundwork was laid a long time ago for acceptance in the marketplace. What I do see is the potential for 100% grassfed cultured products like butter and cheese — BUT, this requires the industry to absorb the excess of these dairies out of the goodness of their own hearts — which is not something to base a business plan on.  Farmers that are wanting to be 100% grassfed should focus on local sales if possible, and develop strong relations with normal marketing channels like local dairies that will work with them. Consumers should understand the hit that these pioneers get financially, and should work overtime to support them.

Filed under: Grazing/Pasture, Organic Dairy on January 28th, 2011