Organic Milk Sales Drop as Consumers Switch to Alternative Dairy

Sales for organic milk have been falling and organic dairy processors are looking at new ways to move product.

A recent story from the Wall Street Journal pointed out that consumers who previously purchased organic milk are now buying alternative products like almond or soy “milk.” Grocery stores are making more space for plant based “milk”

According to Nielsen, organic milk sales fell 2.5% in 2017, slightly less than traditional white milk that fell 4.5%. Plant based milks rose 2.9% in sales. However, the largest gains in milk sales were seen by specialty milk which would include products like lactose-free, a2 Milk and fairlife.

Nielsen data shows organic milk sales fell for the first time since 2013. Organic milk

The changing preferences are hurting prices for farmers as the organic milk supply reaches a peak. Organic Valley, the largest organic dairy cooperative in the U.S., dropped mail box milk prices twice since 2016 after years of price gains.

The cooperative built a new plant in Oregon this year that will produce organic butter and skim-milk powder.

Organic Valley’s CEO George Siemon expects prices to stabilize in 2018 and hopefully improve in 2019, but he wasn’t expecting the market to take its recent turn.

“The market slowed way down. There are signals I may have missed in hindsight,” Siemon tells the Wall Street Journal.

Two farmers interviewed said the change in market conditions have been difficult to deal endure and one was even culling cows. Data from USDA and Rabobank shared by the Wall Street Journal indicates organic mail box milk prices fell from approximately $40/cwt starting in 2016 roughly $27/cwt at the end of 2017.