Survey quantifies cost of organic milk production in California
Leslie J. Butler, Department of Agricultural and Resource Economics, UC Davis
California Agriculture 56(5):157-162. DOI: 10.3733/ca.v056n05p157.
This study measures the cost of organic milk production, and in particular, the differences in cost of production between organic and conventional milk in California. Results show that the total cost of production on a per cow and a per hundredweight basis is about 10% higher for organic producers than for conventional producers in the surveyed regions, and about 20% higher when compared on a statewide basis. The higher costs appear to be due to reduced milk production, higher feed costs, higher average labor costs, significantly higher herd replacement costs and significant transition costs. The higher costs associated with organic milk production are exacerbated to some extent by lower milk yields, and at the same time, are mitigated by the substitution of lower cost pasture for higher priced roughage and concentrate feeds. The higher prices paid for organic milk may more than offset these higher costs compared to their regional, same-sized neighbors.
L.J. Butler is Marketing Economist, Department of Agricultural and Resource Economics, UC Davis.