Can Organic Milk Survive Dairy’s Decline?

The organic milk sector hasn't been hit as hard by declining sales as the conventional dairy industry, but due to the current glut, it still needs to find new ways to expand, according to the Dairy Reporter. Mintel research projects the overall drop in dairy sales will amount to 11% to $15.9 billion from 2015 through 2020.

June 23, 2018 | Source: Food Dive | by Cathy Siegner

Organic dairy has outperformed traditional dairy products by appealing to customers who look for the “USDA Organic” seal and view it as a guarantee of fresher, healthier products. According to the Organic Trade Association, parents between the ages of 18 to 34 are the largest group of shoppers who buy organic, and they are an ever-growing influence in the marketplace.

Excess supplies and lower prices led Organic Valley to post an after-tax loss of about $10 million in 2017, its first loss in 20 years, according to Dairy Herd. And this was in spite of the cooperative’s 4% sales jump that year — and total gross sales of $1.1 billion.

Organic Valley’s 2,043 farm members spread across 35 states are paid about twice as much for their milk as conventional dairy farmers, which puts them in a more solid financial position as long as supplies moderate and prices stay up.