Consumer demand for organic milk continues to grow. Annual sales growth is “still in the high single digits,” write USDA economists Catherine Greene and William McBride in Choices, the agricultural economics journal. Organic milk, which accounted for 5 percent of all milk sales in 2013, has benefited from a change in consumer attitude. “Organic products have shifted from being a lifestyle choice for a small share of consumers to being consumed at least occasionally by a majority of Americans,” write Greene and McBride. They say shoppers are willing to shift to organic as prices become competitive with conventionally produced milk.
The majority of organic dairy farms are small-scale family operations. Some 83 percent of organic farms have fewer than 100 cows and they produce 51 percent of the total organic milk supply. Five percent of farms have as many as 500 cows, and they supply one-third of the organic milk. Greene and McBride say “coexistence of organic producers with very different business models is likely to persist … to some degree.” Organic milk sells at a premium but production costs are higher, due in part to a USDA rule requiring that cows graze on pasture at least 120 days a year. “In particular, research is needed on ways to lower the costs and improve the quality of pasture-based dairy systems in the challenging climates and conditions across the country,” say the economists.