Reprinted with permission from The Milkweed, May 2025
Question: Please comment on organic milk’s seeming division into two main categories: grass-fed and regular (non-grass-fed)? Ed Maltby: As organic is a dynamic market, that is an oversimplified description. All organic is grass and pasture based to the extent the grazing season allows, with a defined minimum of dry matter consumption from pasture each year for all organic livestock. “Regular” (when producers feed grain as well as pasture) organic certification has the highest volume.
There are also two add-on certifications for Grass Fed either through the Organic Plus Trust (OPT) Grass-Fed Organic Livestock certification, controlled by CROPP Cooperative, PCO Certified Organic and Maple Hill, or the American Grassfed Association standards. Their standards vary slightly on what can be included in a Grass-Fed certified ration. Increasingly, some dairies are certified under the Regenerative Organic Certification; also, there is an increasing demand for dairy herds that are 100% A2/A2 certified cows — producing more easily digestible milk that is free of the A1 beta-casein mutation. All dairies are certified under one or several Animal Welfare standards with varying standards and enforcement.
Ed Maltby: We do not have any independent data and no USDA data that separates out Grass-Fed from Regular organic. From a volume perspective, Regular organic produces the most milk because those dairies generally have larger herds with higher production. Probably more farms sell their milk under the Grass-Fed organic certification. Typically [Grass-Fed] produces less volume and is sourced from smaller operations that need the Grass-Fed premium to be economically viable.
Ed Maltby: Independent verified data is collected but is not published by USDA. Nationally the Organic Trade Association has estimated that 65% of organic milk goes into fluid. The different areas of the U.S. will have greater volumes going into manufacturing. The Northeast is a deficit Class I area so most organic milk will go into fluid. There are exceptions. The Lactalis/Stonyfield plant in New Hampshire produces Class 2 products and is not pooled in the federal order, so there is no public data on that volume. Lactalis is expanding its direct supply rather than just sourcing from CROPP Cooperative, so more milk is coming from the Northeast to that plant. Upstate Niagara in [westerm] New York also supplies spot organic milk for different plants and exports to Canada. Origin Milk sources its milk from New York, Pennsylvania and Ohio organic dairies for their cheese.
Ed Maltby: The only published data available on organic milk consumption is on sales of organic packaged fluid milk. Estimates of total organic milk production are only available in the 2021 USDA NASS Organic Survey. While the percentage increase in earlier years was high, more recently growth in fluid sales was level or at a low percentage. Since 2015, national organic fluid sales growth has been for Whole Milk rather than Fat Reduced Milk. Organic Fat Reduced Milk sales peaked in 2014 at 1,702 million pounds and by 2024 it had decreased to 1,423 million pounds. During the same period organic whole milk growth in sales has gone from 742 million pounds in 2014 to 1,597 million pounds in 2024. The growth in fluid organic whole milk follows other industry trends and social changes as more fluid [Whole] milk is consumed and consumers move away from non-bovine juice ….. Anecdotally, reports from Grass-Fed brands show an increase in sales of their product because of consumer preference and they can project a strong future as their product establishes a niche in the consumer market. This is also reflected in their willingness to expand their producer pool and offer a Pay Price that reflects the cost of production for Grass Fed milk, $45/cwt average annually.
Ed Maltby: Anecdotally and through some data, we have seen a loss of organic dairy farms nationally and in the northeast in the last 5 years. Despite data collected through the FMMO and State agencies, only one state (Vermont) publishes reports on the number of dairies separated by organically certified. Class 1 organic milk packaged within the FMMO 1, Northeast was 322.5 million pounds in 2020, increasing to 402.16 million pounds in 2024. This does not consider packaged organic milk from other Federal Orders or for organic milk used in manufacturing. This increase in packaged sales indicates that more organic milk is being produced by fewer dairies, [and/]or more fluid bulk organic milk is being shipped into the Northeast. There has been an increase in the number of organic dairies owned by the Plain communities who tend to be smaller, Grass Fed certified dairies.
Ed Maltby: The Northeast is a high-cost production area for both conventional and organic milk. Organic dairies have no federal safety net and rely on state programs and conventional dairy programs (DMC), which use conventional data, not organic. With increased Extended Shelf Life (ESL) packaging available nationally, organic packaged products from Missouri and Colorado can be sold in the lucrative northeast market at a competitive price. Nationally, organic dairies have disappeared for many of the usual reasons (retirement, family and health reasons) but also because of the stable but low Pay Price from 2017 to 2023. In the Northeast, some states have lost 30% or more of their organic dairies since 2021. Regular organic dairies can grow if they are of sufficient size for economies of scale, can adopt automated practices (robotic milking), are located close to a processing plant with upgraded processing, are on an economic route to pick-up milk, and have an adequate Pay Price (which is currently a Pay Price of at least $38/cwt.). The region is increasing processing capacity and there is a commitment from New York and Pennsylvania to support the dairy sector. Retail buyers generally want a more local supply to hedge against transportation challenges if it is consistent, high quality and meets their requirements for warehousing. Retailers also see a local supply as a good marketing tool with a competitive, affluent and discriminating customer base. 
Ed Maltby: The supply is not finite, as the Northeast is geographically suited for intensive pasture management necessary for organic production. Producers have had no incentive to expand their operations in the last few years as they have been losing money with a low Pay Price and have lost confidence in their buyers responding to their situation, except for Upstate Niagara. The shortage of milk was caused by the milk buyers. They must convince producers that they will be treated better in the future, especially in the case of Maple Hill and Horizon Organic LLC that unilaterally canceled contracts in 2021. If producers can see a profitable market in the future and buyers that honor their commitments to producers rather than international companies and co-op infrastructure, production will expand. Producers will learn new production practices, especially those that transition to Grass Fed to maximize production and herd health. Those buyers who continue to do business as usual will continually be scrambling.
Ed Maltby: Currently all the buyers are offering volume premiums, quality premiums, loyalty premiums, Organic Market Adjustment Premium, low interest loans and an Incremental Growth Adjustment premium, to name a few. The increase in production may be slower than buyers want as the high price of purchased organic dairy replacements (springing heifers averaging $3,500-$5,750 and milking cows at $4,000-$5,900) are difficult to justify and the high price of week-old calves make the cost of rearing organic replacement uneconomic without a reasonable Pay Price. Many producers have been using sexed semen to produce more valuable cross bred calves when Pay Price was low.
Ed Maltby: CROPP Cooperative has declined to comment on claims from producers that they are purchasing milk from two large Texas organic dairies (1,200 and 2,500 respectively). Member owners are disappointed with the coop’s decision on their preference for larger operations rather than increasing Pay Price. They cite low pay prices, purchasing expensive spot milk instead of raising Pay Price and their CEO’s resignation as reasons for switching to a new buyer. Belatedly CROPP coop has started to increase their Pay Price, pay volume premiums for larger herds and give loyalty premiums for those who stay with the coop.
Ed Maltby: DFA ended its supply relationship with Horizon Organic LLC in 2024, and, effective on members’ anniversary dates, DFA no longer provides services to members that ship milk to Horizon. They will not transfer current dual membership to another organic marketer, which applies to all organic buyers, making it more difficult for DFA members to move to a new organic buyer. Any DFA member that wants to transition to organic production will have to leave DFA. DFA members will no longer have a safety net of returning to conventional production under their DFA membership. DFA will not take on any new organic producers.
Ed Maltby: It’s logical, as it will tie in with their existing production facilities and milk hauling companies. They are building a milk pool mostly from Plain Communities that have become disillusioned with the treatment from CROPP Cooperative. Producers have to give CROPP six months’ notice so the increase in product for Maple Hill will not take effect until late summer into the Fall. In 2022 Maple Hill made the mistake of overextending its infrastructure and were forced to cancel large numbers of contracts, but now they reassure producers that they have an established market, efficient management, tighter supply controls and financial backing to grow their brand.
Ed Maltby: The organic business community has worked to expand the dollar value sales of organic, with a strong emphasis on meeting rising consumer demands and preferences either domestically or internationally. The National Organic Program as accreditor for the certification agencies was understaffed and ill-equipped to maintain the integrity of the Organic seal so important for domestic producers and consumers. What followed was domestic and international fraud and no consistency in how regulations were implemented, with a few larger certifiers dominating the political landscape that affects all government agencies. The rapid expansion of organic production has outpaced some certifiers’ capacity to serve certified operations. New fraud-curbing regulations have led certifiers to recognize the true cost of certification and their inadequate infrastructure. As a result some organic certifiers are no longer accepting new livestock operations or providing services to livestock farmers. Others have increased their charges to compensate for increased work, which has raised certification expenses by hundreds if not thousands of dollars for producers. New transitioning organic diaries now have fewer choices of certifiers and are experiencing longer wait times to start their transition. The National Organic Program is working with producer organizations, certifiers and the National Organic Standards Board to assist certifiers in becoming more efficient, more adept at analyzing risk and to streamline the certification process with a Sound and Sensible initiative. Some certifiers are merging to provide better service to their clients. NODPA can recommend some certifiers that are open to new clients and have the capacity to provide services at competitive rates.
Ed Maltby: Consumers may have questions about the integrity of regular organic milk, but grass-fed organic milk is marketed for its creamier, cleaner taste and higher nutrient levels compared to regular organic milk. Consumers often think it comes from smaller family farms, though larger herds are possible if economically viable. Horizon Organic LLC and Origin Milk use one certification program, while Maple Hill and CROPP Coop use another. This presents similar risks of regulation interpretation, fraud, and abuse as with regular organic milk. Marketing influences initial perception, but continued purchases depend on tasting a noticeable difference.
Ed Maltby: For most of the larger operations the cost-share of 75% of their certification costs paid during the program year, not to exceed $750 per certification scope, is a relatively small expense and they have the infrastructure to provide information directly from electronic data. For the smaller operations the cost may be a higher percentage of their operating budget, especially with the increase in charges that certifiers have recently imposed. Some certifiers have an extra charge in the hundreds of dollars if a producer is not electronically literate or does not have access to the internet, as some Plain communities choose not to. These producers will feel the effect of the loss of cost-share for their certification expense, which will be magnified by the loss of funding for programs that assist producers who are transitioning to organic. If the Pay Price and incentives remain at the current level and producers see a responsible reaction to increased production costs, producers will be able to manage the increased time and cost to be certified. If not, producers will not transition to organic production and will diversify into other areas and occupations.
The Milkweed is a monthly dairy marketing report for dairy farmers and other people with an interest in the dairy industry. Contact Information: Peter Hardin, Publisher/Editor, The Milkweed, PO Box 10, Brooklyn, WI 53521-0010
** Ed Maltby is the executive director of the Northeast Organic Dairy Producers Alliance (NODPA), a position he’s held since 2005. Ed watches organic dairy events like a hawk. The Alliance’s purpose is to expand knowledge about organic dairy production, marketing and regulatory issues – for the purpose of achieving fair milk prices for organic dairy farmers. NODPA produces a highly informative publication: NODPA News. NODPA’s website is: www.nodpa.com
Posted: to Industry News on Sun, Jul 13, 2025
Updated: Mon, Jul 14, 2025
