Organic milk markets are trembling on news that Aurora Dairy is in compliance
October 11, 2017
Pennsylvania has a number of dairies producing milk in compliance with organic standards. All those involved in organic milk markets were closely watching the U.S. Department of Agriculture's response to an investigation of Aurora Dairy. This dairy has over 20,000 cows milking on a number of farms in Colorado and Texas and has become the leading producer of organic milk in the country. USDA investigated Aurora on the basis of complaints that they were managing their herds in ways that violated the national organic standards for milk production. USDA just announced that they have concluded their investigation and found no violations of the organic standards by Aurora. This finding has implications in the organic dairy industry. Over the past couple of years, the organic milk markets have suffered from the same basic factor that has plagued conventional milk markets — namely producing more milk than is needed by the market. As a result, prices decline. In Pennsylvania, there are a few dairy farms that are in the three year transition to organic that are being allowed to continue, but cooperatives and companies handling organic milk are not starting any new herds on that three year timeline. Currently, there is simply no need for additional organic milk.
In the past, organic milk was produced by small farms, and the premium for that specialized product helped many small farms maintain profitability, even with increased costs of production. If organic milk production standards can now be met on large- scale production operations, as Aurora has now proven to the satisfaction of USDA, then organic milk will continue to be plentiful, prices will trend lower, and the status of organic milk will become more of a commodity, rather than a distinctive product. The organic dairy market is quietly trembling with this disruptive vision of the future.