Costs of Organic Milk Production on U.S. Dairy Farms

William McBride and Catherine Greene

Review of Agricultural Economics, 2009, vol. 31, issue 4, 793-813

Abstract: The impact of organic participation on milk production costs is evaluated using data from a nationwide survey of dairy operations. Organic dairies have estimated costs about $5 to $8 per cwt higher than conventional dairies. They also receive an average milk price premium of $6.69 per cwt in 2005. Production costs are estimated to be only $3 to $4 per cwt higher among pasture-based dairies. Results suggest that small conventional dairies may consider converting to the organic approach, but startup organic dairies are not likely unless they can enter at a much larger scale than the industry norm or can utilize pasture as a primary dairy feed source.

Date: 2009
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