Executive Briefings

Dairy Farmers Have an Organic Milk Surplus As Sales of Almond, Soy Milk Rise

After responding to increased demand from consumers, dairy farmers have now found themselves with a surplus of organic milk. Shoppers have been opting for plant-based alternatives like almond milk more often than organic cow’s milk, leaving the industry with more of the very perishable organic product than retailers can sell.

Dairy Farmers Have an Organic Milk Surplus As Sales of Almond, Soy Milk Rise

Though the total volume of milk sold in United States retail between 2010 and 2015 declined by 13 percent, organic milk sales increased by 22.5 percent, according to industry tracker Euromonitor.

The rise in popularity of organic milk — driven by health-conscious consumers and the popularity of trends like the paleo diet — led producers to expand. But sales slowed as more and more consumers view cows’ milk as less healthy than options like almond and coconut milk — common dairy substitutes for diets like Whole30.

The decline in demand comes just as the industry’s efforts to increase production created a greater supply. Many organic milk producers are now planning to make butter, cheese, yogurt, or creamers out of the surplus.

The number of cows producing organic milk grew by more than one third between 2011 and 2016, according to the U.S. Department of Agriculture. But the price dairy farmers received for 100 pounds of organic milk fell from nearly $40 at the start of 2016 to about $27 late last year, according to data from the government and dairy-cooperatives collected by Rabobank.

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Though the total volume of milk sold in United States retail between 2010 and 2015 declined by 13 percent, organic milk sales increased by 22.5 percent, according to industry tracker Euromonitor.

The rise in popularity of organic milk — driven by health-conscious consumers and the popularity of trends like the paleo diet — led producers to expand. But sales slowed as more and more consumers view cows’ milk as less healthy than options like almond and coconut milk — common dairy substitutes for diets like Whole30.

The decline in demand comes just as the industry’s efforts to increase production created a greater supply. Many organic milk producers are now planning to make butter, cheese, yogurt, or creamers out of the surplus.

The number of cows producing organic milk grew by more than one third between 2011 and 2016, according to the U.S. Department of Agriculture. But the price dairy farmers received for 100 pounds of organic milk fell from nearly $40 at the start of 2016 to about $27 late last year, according to data from the government and dairy-cooperatives collected by Rabobank.

Read Full Article

Dairy Farmers Have an Organic Milk Surplus As Sales of Almond, Soy Milk Rise