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Organic milk prices rise in the USA

by Kai Kreuzer

Organic milk prices rise in the USA Foto: Organic Trade Association/USA

Organic milk prices are surging because of last year's weather - from the drought in the southern plains to the July heat that scorched the mid-west - and the demand for organic milk that has been recovering from the recession. A 65% rise in the price of organic corn over the past year is forcing many organic dairy farmers to feed less to their animals.

Molly Keveney, spokeswoman for WhiteWave Foods' Horizon, the leading brand in organic milk, says consumers can typically expect to pay about $4.18 for a half-gallon of organic milk. And a 14 cent increase in the wholesale price is set to take effect on March 1. The news agency Reuters reports that, according to the most recent industry data, about 4 percent of all dairy products sold are organic. As a consequence of the upcoming price increase, many articles have appeared in the press in the USA discussing the pros and cons of organic milk.

Phil Lempert, a grocery industry analyst, says the demand for organic milk expanded when consumers began expressing concerns about growth hormones in conventional milk. Seeing that the market was shifting, the grocery giant Kroger Co announced in 2007 that it would no longer carry milk that contained synthetic growth hormones. After that, Lempert says, one U.S. retailer after another followed suit. A significant portion of the industrialized world - including Europe, Canada, Japan and Australia - had already banned the substance from their dairy products years earlier. While organic milk costs more to produce than non-organic milk, organic does not account for all of the price difference. Experts say mark-up varies regionally, but overall there is a much higher margin on organic milk.


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