The rise of organic milk in the US: Market trends and forecasts

In recent years, organic milk production has seen steady growth. Organic milk volume grew 53% between 2014 and 2021, totalling 5.2 billion pounds (about 2.36 million metric tonnes) in 2021. A myriad of factors have been integral in driving this trend, according to a recent Rabobank report.

Important factors that have been a driving force behind this growth are consumer demand and preferences, regulatory developments including better labelling, certification and standards, and increased production, according to a new RaboResearch report by senior dairy analysist Lucas Fuess.

In 2021, production reached 5.2 billion pounds (approximately 2.36 million metric tonnes), accounting for 2.3% of total US milk production. In terms of which states produced the most organic milk in 2021, the report indicates that they are the same top 5 states that produced conventional milk, but not in the same ranking order.

Leading organic milk-producing states in 2021, listed from highest to lowest production:

• Texas
• California
• New York
• Idaho
• Wisconsin

Volume of organic milk per farm

In terms of milk volume per farm, Texas has the highest record of milk volume per farm at 78.1 million pounds (about 35,435 metric tonnes) in 2021 (suggesting an average farm size 2,800).

Idaho stood at 17.5 million pounds (7,938 metric tonnes) per farm per year (average farm size of 650). Wisconsin averaging 900,000 pounds (approx. 408 metric tonnes) of milk per farm per year and New York with 800,000 pounds (363 metric tonnes) assuming an average farm size of 30 in both states.

Organic milk sales continue to climb

Organic whole milk sales saw 4.9% growth in 2023 and 13.2% growth 2024. US organic milk sales totalled US$69.7 billion in 2023. Furthermore, it had a compound annual growth rate of more than 7% between 2012 and 2023.

Whole milk emerging as a growth category

The report added: “On a volume basis, conventional whole milk sales climbed 483 million pounds (219,093 metric tonnes) between 2022 and 2024, higher than the organic whole milk sales increase, which was up 252 million pounds (114,305 metric tonnes) in the same period. While the overall conventional category remains in decline, not all styles of milk are seeing sales weaken, with whole milk emerging as a growth category across both conventional and organic.”

Increasing demand for organic milk predicted

From a legislative perspective, there is a push to improve transparency, boost support for organic producers and increase data availability.

From a production perspective, organic milk production is set to grow further in the coming years due to previous growth trends and consumer demand which is on the increase. According to RaboResearch, annual organic milk production will go beyond 6 billion pounds (2.72 million metric tonnes) in 2030. Most of the growth will be from the states of Texas and Idaho, it adds.

Organic milk market outlook

The organic dairy market is expected to reach new heights, from approximately US$27 billion in 2024 to over US$45 billion by 2033, with a CAGR almost 6%. With further forecasts stating that it could reach US$34.6 billion by 2035.

However, despite the expected expansion in the coming decade, challenges in the sector will still play a part. Price is a significant aspect to note as it costs more to produce organically and this will impact lower earning consumer access, complexity and cost of organic certification as well as supply chain logistics are also factors that pose challenges in the organic dairy sector.

Source: RaboResearch report, ‘US organic milk production grows to meet rising consumer demand’.