US organic milk production grows to meet rising consumer demand

The US organic dairy sector is experiencing steady growth, driven by evolving consumer preferences, regulatory developments, and expanding production. The USDA Organic Program has provided a consistent framework for organic certification, helping organic dairy (and egg) sales reach USD 8.2 billion in 2023. Organic milk production rose from 3.4 billion pounds in 2014 to 5.2 billion pounds in 2021, with Texas leading in output. Despite challenges in data collection, RaboResearch estimates organic production has grown since 2021 due to healthier margins especially in 2024 and 2025, and projections suggest organic milk production could exceed 6 billion pounds annually in the coming years.

Legislative efforts are aiming to improve transparency and provide support for organic producers. Although organic dairy farms face higher costs due to stricter standards, they also command premium prices. The consumers willing to pay this premium are motivated by perceptions of health, sustainability, and quality. Driven by this consumer demand, organic fluid milk has gained market share and seen volume growth, even as conventional milk sales decline.

The strategic interest from private equity and M&A activity, such as Platinum Equity's acquisition of Horizon Organic, highlight the sector's potential. Looking ahead, global organic dairy sales are expected to continue growing, though price and farmer barriers to entry remain key challenges.