A number of U.S. dairy farms, especially small farms, are struggling to stay in business due to difficult economic conditions. Switching to organic milk production can be one of the ways they can improve farm profitability. As Richard Ghilarducci specifically mentions, dairymen in the northern part of California milk hundreds of cows, not thousands, and hence are unable to really compete with the bigger companies.  Therefore it makes sense for such smaller dairies to focus on the niche market of organic dairy.

Richard Ghilarducci offers an overview of organic dairy farming

Organic dairy farming is an eco-friendly practice, where no hormones or antibiotics are used to increase milk product. It has the potential to improve the profit prospects of the farmers, as the popularity of organic dairy products keeps rising with time. Organic dairy has been enthusiastically embraced by consumers in the United States, leading to an increase in retail sales of organic milk. A large number of consumers in the country perceive dairy products sourced from cows fed on organic or natural diets as superior in quality in comparison to conventional dairy products. Organic Dairy farming basically implies raising animals on organic feed, or pastures cultivated without the use of fertilizers or pesticides.

Organic dairy farming places a strong emphasis on environmental sustainability and animal welfare. Organic farmers follow practices that minimize synthetic inputs, reduce the use of chemical fertilizers and pesticides, and promote soil health. They also tend to use of genetically modified organisms (GMOs) and prioritize sustainable land management. The regulations governing organic dairy production require farmers to provide animals with access to the outdoors, pasture grazing, and humane living conditions.

As Richard Ghilarducci mentions, organic dairy farming allows farmers to tap into niche markets that specifically cater to consumers seeking organic, sustainably produced dairy products. By aligning with the values of these niche markets, organic dairy farmers can establish brand loyalty and gain a competitive edge in a segment of the dairy market that is less saturated. Ghilarducci is the President and Chief Executive Officer of the Humboldt Creamery Association. Humboldt Creamery is the oldest dairy cooperative in California. The northern part of California features expansive, emerald green fields, and hence many dairies here are considered to be well suited to produce milk for the organic market. A large number of dairies here are pasture based and they can grow most of their forage in an organic manner. As a result, the bulk of its feed is something the dairies have complete control over

Profitability is always a topic of discussion in the organic dairy industry. However, the good news is that the organic industry is growing and consumer demand is very high. The key to keeping the small organic dairy herds profitable is lowering feed costs and increasing dry matter intake from pasture to reduce those feed costs. There is room for all herd sizes in the organic dairy industry. They all contribute to the creation of economic activity and supply milk for a growing consumer demand for organic dairy products. All organic dairy producers should understand their costs of production for the purpose of improving the viability, efficiency, and profitability of their operations.