A surge in feed grade soybean prices is skimming profits from dairy producers across the United States, just as milk prices recover from a devastating two-year slump. Producers of organic milk, who require organically grown soy-based feeds, are paying the largest increases.

“The price of grain has gone up every time we order. Now it’s about $350 – $50 more a ton than last year – and I use 8 tons a month,” said Bernard Grignon, owner of Sunset View Farm, an organic dairy farm in Pittsfield.

Across the United States, soy prices have climbed as much as 70 percent in the last 12 months to a 15-year high of more than $10 per bushel. On Monday, Boulder, Colo.-based Horizon Organic, a leading manufacturer of organic milk, announced an incremental increase in the amount it pays its suppliers beginning May 1 to help offset their growing feed costs. Horizon president Chuck Marcy said he did not expect an increase in prices charged to retail groceries.

Prices for soy-based grocery and food products do not appear to be affected. Buyers at the Natural Living Center in Bangor and at John Edwards Market in Ellsworth say they have seen little or no change in prices for soy-based food and cosmetic products.

After World War II, soybeans became widely used as a protein additive in supplemental feed to help cattle produce greater quantities of milk. Poor weather last year cut by 15 percent the amount of the legumes produced in the Midwest, where the bulk of U.S. feed-grade soybeans are grown. A growing agricultural economy in China has snapped up a record 13 percent of soy-based feed supplies since September, leaving some industry analysts predicting supplies could run entirely dry before harvest in the early fall.

“We’ve got crushing plants across the U.S. shutting down because of no volume of soybeans to put through them,” said Vern Delong, executive director of the Maine Agricultural Bargaining Council in Presque Isle. “It’s going to generate decisions by a few of the boys to grow soybeans.”

Canola overtook soy in the past two decades as the favored oil seed crop in northern Maine, where canola, mustard and soybeans are used in rotation with potatoes, the region’s real moneymaker.

Extension educator and small-grains agronomist Matt Williams in Houlton said the soybean crop peaked in Maine at between 4,000 and 5,000 acres a decade ago.

“I’d say it was, at best, half of that last year,” he said.

But with a few weeks to go before the planting deadline for the fall soy crop, growers are shopping, but soy seed is scarce.

“With these kinds of prices, it’s a seller’s market and a buyer’s problem,” Williams said.

Delong said he located 600 acres’ worth of soy seed and has locked in a contract for delivery in October at $7.50 per bushel. Aroostook growers so far have committed to plant 200 acres of the seed.

In March, the Department of Agriculture said it expected growers to plant a record 75.4 million acres of soybeans. With China’s intake doubled in the past three years to 20.5 million metric tons, and with yields in Brazil, the world’s second-largest soy producer, hit hard by drought and crop disease, analysts say U.S. growers must break record per acre yield rates this year in order to satisfy demand.

Russell Libby, executive director of the Maine Organic Farmers and Gardeners Association, said large organic meat producers such as Tyson Foods Inc. have moved into the market recently, further boosting demand for soy.

About 160 of Maine’s 385 dairy farms are organic, a number increasing by about a dozen each year. The price of soy-based feed is influencing a number of dairy farmers preparing to shift to organic.

‘”The conventional price of milk is really high right now, so everybody is trying to time when they are going to make their conversions,” Libby said. “The price differential for organic is really small right now.”

Some larger organic dairy producers in Maine grow their own soy crop in order to supply their own feed. In Pittsfield, Grignon said a late summer shortfall would have a minimal impact on his operation, because he feeds his cows less manufactured feed as the season’s forage comes in.

“In the spring, when the grass comes out, I won’t feed them any and they do just as good,” he said. “I’ll probably only buy 10 ton all summer long.”