Organic Dairy

Overview

In 2016 2.56 billion pounds of organic milk products were sold. That amount represented 5 percent of all milk products sold that year. In the past, organic milk cost considerably more than conventional milk. In 2016, the annual average advertised price for organic milk was $3.97 per half gallon compared to $1.88 per half gallon for conventional milk. (USDA, AMS)

Production

More than 2,500 farms in the United States produced organic milk in 2016. The largest number of farms were located in New York (486), Wisconsin (455), followed by Pennsylvania (303). (USDA, AMS)

During 2016, nearly 280,000 dairy cows were certified organic, up from 241,112 dairy cows in 2015. The states with the highest number of certified organic dairy cows were (in order): California (50,136), Wisconsin (27,980), Texas (27,948), and New York (26,246).  (USDA, AMS)

Organic milk production in 2016 was 4.03 billion pounds. California produced 795.7 million pounds, or 20 percent, of the organic milk. Other states producing large quantities of organic milk were (in order): Texas, Wisconsin, Oregon and New York. (USDA, AMS)

Marketing Channels

Some dairy operations bottle and sell the milk and/or other dairy products locally. For national distribution, products tend to move from the farm to a cooperative processor/bottler and then to a private distributor before reaching retail outlets.

Management

The cost of production for organic dairies is greater than the cost for standard dairies. Organic feed costs more than standard feed, and organic production uses more labor and capital. When organic milk brings premium prices, profits are higher for organic dairies. Herd size matters to organic costs. Estimated total costs drop sharply as herd sizes increase.

USDA standards for organic food were implemented in 2002. Organic dairy is raised in a production system that promotes and enhances biodiversity and biological cycles and uses only organic feedstuffs and health protocol. It is based on minimal use of off-farm inputs. Dairy cattle producing organic milk are not given antibiotics and growth hormone stimulants. In general, organic foods are minimally processed with artificial ingredients or preservatives.

 

Marketing

Processing/Manufacturing

Production

  • Characteristics, Costs, and Issues for Organic Dairy Farming, ERS, USDA, 2009 - Using 2005 data for U.S. dairy operations, including a targeted sample of organic milk producers, this study examines the structure, costs and challenges of organic milk production.
  • A Comparison of Conventional and Organic Milk Production Systems in the United States, ERS, USDA, 2007 - USDA's 2005 Agricultural Resource Management Survey (ARMS) included a sub-sample of organic dairies and collected detailed information about the production practices and costs on dairy farms in 24 states representing over 90 percent of national milk production.
  • Dairy, ERS, USDA.
  • Dairy Resource List: Organic and Pasture-Based, Appropriate Technology Transfer for Rural Areas (ATTRA), NCAT, 2006 - This resource list offers many sources of information helpful to organic and pasture-based dairy farmers.
  • Dairy Your Way, North Central SARE, 2006 - This publication was created to provide information that will help producers explore the many choices available for today’s dairy farms.
  • Health-Care Principles and Practices for Organic Dairy Farms, University of Maine, 2008.
  • Organic Agriculture in Wisconsin: 2012 Status Report, University of Wisconsin and Wisconsin Department of Ag, 2012 - Wisconsin boasts the second largest number of organic farms in the nation and ranks first among the states for the number of organic dairy and beef farms.
  • Organic Agriculture in Wisconsin: 2009 Status Report, Center for Integrated Agricultural Systems, University of Wisconsin-Madison and the Wisconsin Department of Agriculture, Trade and Consumer Protection, 2010 - Wisconsin is the top-ranked state for number of organic dairy farms. In 2007, Wisconsin’s organic dairy sales reached $57.6 million.
  • Organic Agriculture in Wisconsin--2007 Status Report, Center for Integrated Agricultural Systems, University of Wisconsin-Madison, 2008.
  • Organic Dairy for the Next Generation, Heather Darby, University of Vermont, 2011 - This YouTube presentation was recorded at the 2011 USDA Organic Farming Systems Conference.
  • Organic Dairy Handbook, Northeast Oganic Farming Association (NOFA)-New York, 2009 - This book outlines the practical knowledge and systematic understanding necessary for conventional farmers to make a successful transition to organic production, for new farmers to develop a successful organic dairy business and for newly transitioned organic dairy farmers to strengthen their overall farm management.
  • Organic Dairy Production, eXtension.
  • Organic Livestock Feed Suppliers, ATTRA, NCAT - This is a listing of certified organic livestock feed suppliers. Contact information is provided for each company along with a brief description of rations and specialty items.
  • Organic Milk Production Costs and Returns in 2005, ERS, USDA, 2007 - USDA's 2005 Agricultural Resource Management Survey (ARMS) included a sub-sample of organic dairies and collected detailed information about the production practices and costs on dairy farms in 24 states representing over 90 percent of national milk production.
  • Organic Production Enhances Milk Nutritional Quality by Shifting Fatty Acid Composition, Washington State University, PLOS ONE, 2013 - A recent study analyzing organic milk from cows found that organic milk contains significantly higher concentrations of heart-healthy fatty acids compared to milk from cows on conventionally managed dairy farms. The study is the first large-scale, U.S.-wide comparison of organic and conventional milk, testing nearly 400 samples of organic and conventional milk over an 18-month period.

Financial

Organic Dairy Production Planning Concepts – Iowa State University – Ag Decision Maker

Marketing Organic Milk – Iowa State University – Ag Decision Maker

Enterprise Budgets in Organic Dairy Production

Sources

Organic Agriculture Surveys – USDA NASS

Organic Market Analysis, Organic Trade Association (OTA).

Estimated Fluid Milk Products Sales Report, USDA, AMS

Organic Marketing Overview, USDA ERS

Dairy, Economic Research Service (ERS), USDA.

National Milk Producers Federation

Organic Production, ERS, USDA.