Organic Dairy Profile

Revised November 2017

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.

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.