Strong demand for organic milk will keep prices high enough to provide sufficient incentive for dairy farmers to produce more, according to one of the largest U.S. organic dairy cooperatives.
Grocery chains including Publix Super Markets, Inc., faced organic milk shortfalls over the past three months after extreme summer heat and soaring feed costs led to lower production.
But even as prices climb, consumers probably will continue to buy more organic milk, said Elizabeth Horton, a spokeswoman for Wisconsin-based Organic Valley Cooperative. The price premium that organic dairy farmers receive over conventional milk will also encourage production, she said.
“Organic growth is too great to be slowed by this, and disparity in pay price between organic and conventional too big for many farmers to give up organics,” Horton said. “The future of organics is very bright,” she adds, despite rising input costs. Demand for organic milk has risen rapidly in recent years even with retail prices nearly double those for conventional products. During the first 10 months of 2011, organic whole milk sales rose 17 percent over the same period in 2010, according to USDA data.