Thirty years of organic dairy in the United States: the influences of farms, the market and the organic regulation

The US organic milk food system has several interesting characteristics. The product has been enthusiastically embraced by consumers, resulting in increased retail sales of organic milk. The processing sector is oligopolistic, with three dominant firms. At the farm level, the definition and enforcement of regulations relating to access to pasture and transitioning livestock have been the subject of controversy and slow to change to meet the needs of the sector. This paper uses two sources of the United States Department of Agriculture (USDA) data (Agricultural Resource Management Survey and Organic Survey) and other evidence to trace changes in the discourse about organic dairy, the market, processing and farm sector, along with the evolution of the regulation. Concern over inconsistencies in the language and enforcement of the regulation at the farm level continued throughout the 30-year period. We find evidence of strong and continued growth of the organic dairy sector at the farm level, among all regions of the US. The amount of pasture available per cow increased as the access to outdoor rules tightened. In 2016 many dairies failed to meet the 30% threshold for feed from grazing. Another key finding, which may underlie the internal debates, is that the profitability of large-scale organic dairies in the West substantially increased in 2016. The organic dairies in other regions did not experience this improvement, although their profitability remained similar to prior years. While there is evidence of problems with the regulation, we note that the structure of the processing sector is an important but overlooked dimension. Thus, additional research into the farmer-processor relationship is needed to improve our understanding of the dynamics of the organic dairy farm sector.