- After surging in popularity in recent years, organic milk sales are starting to slip, according to an article in the Wall Street Journal. Conventional milk consumption has been falling for years, but organic milk was able to buck the trend until 2017.
- Dairy farmers and producers who scrambled to meet increased demand for organic milk are now stuck with an oversupply as consumers’ tastes have turned away from cow milk to plant-based alternatives such as nuts and soybeans.
- Excess organic milk is now being transformed into cheese, yogurt and creamers, the business paper said. Some organic dairy farmers, whose prices have taken a hit, are sending milk-producing cows to slaughter early to offset costs.
Organic milk producers can now empathize with their conventional counterparts as they feel the impact of plant-based beverages in the marketplace.
Once an exception to the declining interest in liquid milk, organic dairy farmers faced a slip in sales in 2017. According to the U.S. Agriculture Department, organic retail prices for organic whole milk in December were down in 17 of the 29 cities surveyed, while rising or remaining unchanged in the other 11, compared to January 2017. The government estimated the retail price spread between an organic half gallon and conventional half gallon carried an organic price premium of $0.93.
The same villain is blamed for reduced interest in both traditional and organic dairy milk: plant-based options, such as almond or coconut milk. Consumers who largely drove the organic milk movement have had a change in taste, and are now turning to alternative varieties, which many view as healthier. A Mintel report found U.S. non-dairy milk sales grew 9% in 2015.
Organic dairy farmers and milk producers are now stuck with a surplus of expensive product that has an inconveniently short shelf life. Some are transforming their excess product into organic cheese, creamers and yogurts.
An alternative idea would be to market reduced-price organic milk as an ingredient to food manufacturers looking to clean up their labels. Consumers who are interested in products with easy-to-pronounce ingredients also may be swayed by ads that compare the relatively simple list on a dairy milk carton (organic milk and vitamin D) to the more complicated one found on most plant-based milks.
The word "milk" itself is highly charged, and its use by alternative beverages continues to be contested by the dairy industry. The first legal challenge came in 2013. A California federal judge dismissed a lawsuit against major dairy processors that claimed these companies mislabeled their plant-based dairy products as "milk" even though they do not come from cows. Lawsuits have continued to crop up in subsequent years, but none of them have moved the needle on the issue.
The declining interest in organic milk is mirroring that of cage-free eggs, to a certain extent. Both items were popular and growing for a number of years, and had the added perk for producers that some consumers were willing to pay a premium for their goods. However, cage-free eggs have not been able to maintain their projected growth, prompting some producers to curtail output, and it would appear organic milk is suffering a similar fate. While organic milk's overall popularity is unlikely to ever dissipate, it's evident that new competitors have succeeded in disrupting this onetime dairy darling — and their pressure is unlikely to ease up anytime soon.