With USDA Organic Dairy in Decline, Grass-Fed Sales Are Booming

But even as demand increases for grass-fed milk, many producers aren’t earning a decent living

Elizabeth G. Dunn


Grazeland Jerseys photo

Jon and Miranda Powers live in a white clapboard farmhouse in a sparsely populated part of New York state where the foothills of the Adirondacks spill down toward the Erie Canal. Across from the house is a red barn, and around it, expanses of pasture broken up by the occasional cluster of poplar trees. On a cold, sunny morning in April, before the ground has begun to thaw, Jon and Miranda and I stand in the field behind their house, watching 50 woolly cows go to town on a fresh bale of hay.

Miranda, who wears jeans and a blue hooded sweatshirt, her brown hair pulled back in a ponytail, points out what she calls the herd’s boss cow: a large, dark cow named Sweettart, with a demeanor so imposing that the others wait for her to start eating. A blond, leggy cow named Pond, who reminds me, for reasons that I cannot articulate, of Rose Nylund from “The Golden Girls,” drifts away from the feeding frenzy to give us a closer look.

My conceptions of farm life have been formed pretty much entirely by children’s books and the pictures on the front of milk cartons, so this seems to me like a typical enough tableau: big red barn, animals with names, hay bales, the works. But Miranda assures me that what we’re looking at here at Grazeland Jerseys in Holland Patent, New York, is, in fact, weird: So weird that she and Jon have hesitated to enroll their boys in 4-H with the other local farm kids, for fear they will be teased.

“Yeah, we’re freaks,” Jon says. “But I’m cool with it.”

For starters, the cows are outdoors. It’s standard practice around here to confine them to barns during the cold months, but Jon and Miranda don’t see how that makes sense. For every day the cows are inside, someone has to haul in their feed and haul out their manure. For every day the cows are outside, they can fertilize the pasture, and the remnants of their hay bales help enrich the soil. The Powers started leaving the cows outside for more and more of the winter, discovering that the animals were seemingly happy and healthy in all but the bitterest conditions.

The animals are funny looking, too. The archetypal American dairy cow is an immense black-and-white Holstein: a milk factory on legs. This farm raises mostly doe-eyed brown Jerseys — they produce creamier milk, but less of it — crossed with a French breed called a Normande, a small brown speckled cow that Miranda judged to be rugged enough to tolerate cold winters on pasture. If Holsteins are the Hummers of the bovine world, then these Normande crosses are compact SUVs.

Jon and Miranda are first-generation farmers in a state where dairies don’t open; they close. New York has lost some 11,000 of them since the 1980s, according to data from the State Department of Agriculture and Markets. Miranda, an Air Force brat, attended Cornell University, intent on becoming a horse veterinarian. Instead, she wound up falling in love with cows, and with Jon, and the two scraped together enough money in 2007 for a down payment on a farm they refer to as a “fixer-upper” — a house built the same year Lincoln was assassinated, on land where corn had been farmed intensively for decades. The goal was to operate a dairy just big enough to support a family, but small enough for the couple to run without working themselves into the ground.

Things got off to a rocky start. Four years in, the price of the corn they were feeding their cows hit record highs, eating up any chance for the farm to turn a profit. That’s when Jon and Miranda made the unorthodox decision to wean their cows off of it, feeding them only grass. Since then, their singular obsession has been on bringing the farm’s soil quality up enough to produce all the lush, nutritious pasture the cows need, with as little intervention as possible.

They began managing the cows in an intensive grazing pattern, moving them two to three times a day to promote the healthiest grass growth. They bred them year after year to select for animals that thrive on that all-grass, outdoor lifestyle. In 2016, Grazeland Jerseys became Certified Organic. The same year, they started selling their milk to Maple Hill Creamery, a leading grass-fed yogurt and milk producer in Kinderhook, New York, for three times the price it would fetch on the conventional market.

Grazeland Jerseys photo


For decades, small dairies looking to stay small went organic. But as organic dairy hit the mainstream — it is now a nearly $10 billion category in the United States, sold everywhere from co-ops to Costco to gas station convenience stores — those family-scale farms began competing with operations milking cows on an industrial scale. Some farmers, like Jon and Miranda, are now taking their chances on a promising if uncertain, new sliver of the organic category: 100 percent grass-fed milk, which has begun to lure consumers with its health benefits and environmental bona fides.

Today, there are about 2,500 Certified Organic dairy farms in the United States, and Grazeland Jerseys is one of about 400 of them that exclusively feed their cows grass. That number has more than doubled since 2016, fueled by consumer demand. Sales of grass-fed organic dairy products grew 56 percent in 2018 alone, according to the Chicago-based market research firm SPINS, at a time when both conventional and organic dairy sales declined overall.

Steve Hughes, who invests in the natural foods sector, has described the rise of grass-fed livestock products as the most exciting market trend he has witnessed in his 40-year career. “I believe that, over the next 10 to 15 years, it will turn out to be one of the most disruptive areas of the food industry,” Hughes said recently. His growth equity fund, Sunrise Strategic Ventures based in Boulder, Colorado, invests in three grass-fed meat and dairy companies, including Maple Hill Creamery.

Grass-fed organic milk, yogurt, and butter sell at a premium to mainstream organic options, and the shoppers who trade up for it do so because it embodies a set of characteristics that consumers increasingly require of their food. One, it appears to have nutritional advantages. A growing body of research has shown that milk from cows fed on grass is substantially higher in heart-healthy omega-3 fatty acids. It’s also higher in conjugated linoleic acid (CLA), thought to be linked to heart health and weight management. Fans of grass-fed milk and yogurt also praise its full flavor: earthy, slightly gamy, and, well, grassy. The taste profile morphs seasonally. Spring and summer’s fresh pasture yields a brighter, vegetal milk; winter milk, when the cows are on hay, can taste vaguely musty.

There’s also the ecological rationale. For millennia, large ruminants like cows and bison have existed harmoniously with grasslands, and grass-fed dairy restores that natural symbiosis. When cows graze, it leads to healthier grass, which in turn leads to healthier soil, which leads to healthier grasses, and healthier cows: a regenerative cycle. Compared to crop fields, fertile pasture traps more carbon and holds water better, hedging against droughts, preventing floods, and helping to minimize nutrient runoff that poisons nearby waterways. That chain breaks when cows are fed corn, which pulls nutrients from the soil as it grows. Plowing causes soil erosion, which releases carbon into the atmosphere.

Like many other grass-fed dairy farmers I spoke with, Jon and Miranda have noticed that their cows are healthier on the grass-only diet. Fay Benson, a dairy expert with Cornell University’s cooperative extension, told me that conventional dairy cows often “burn out” after a year or two of intensive milking, but that it’s not unusual for grass-fed ones to produce milk for seven years or more. “Any time you remove stress on animals by lowering production demand, they’re healthier,” Benson said. At Grazeland, half the cows are over the age of 10: geriatric, by dairy standards. Vet visits are a rarity.

As with many of the best ideas in food, grass-fed dairy is an old one experiencing a resurgence. For most of our 7,500-year history of milking cows, they’ve eaten grass. It wasn’t until the 20th century that the idea became widespread that if you fed the animals grain, it would significantly boost their milk production, while also providing a handy use for the surplus corn grown throughout the Midwest.

Confining cows to barns, or feedlots, and delivering them grain by the ton relieved farmers from the labor-intensive task of bringing them in from the field to milk; the advent of antibiotics controlled diseases that would result from the close confinement, as well as the general wear and tear caused by feeding corn to an animal genetically programmed for eating grass. Selective breeding has produced ever-larger cows with an enormous capacity to convert food to milk. Today, the average American cow produces 23,000 pounds of milk a year, up from 10,000 pounds in 1970, according to U.S. Department of Agriculture reports on the economic changes of dairy farming.

When the organic dairy movement began in the 1980s, it was a referendum on that bigger-is-better production ethic and a return to the primacy of the pasture. The first wave of organic farmers didn’t take a hard-line, 100-percent-grass approach, but grazing was central to the mission. Francis Thicke, an Iowa farmer and soil scientist who was among the first to market his milk organically, recalls an ethos grounded in supporting the cow’s natural behaviors, from roaming grasslands to nursing her calves.

“Back then we didn’t have an organic market, we just did it based on our philosophical commitment,” Thicke told me. Farms like his could bottle and sell their milk locally, at a substantial premium to commodity prices, allowing them to keep their herds small.

But over the past 30 years, as organic dairy grew, 15-cow Amish farms began to share the USDA Organic seal with 15,000-cow corporate ones. Today, that focus on grass is far less pervasive, as more and more organic milk is produced in industrial confinement operations rather than the small family farms evoked in organic marketing materials. According to the USDA Certified Organic Survey, as of 2016, six organic farms in Texas milked more cows than all 486 of New York’s organic dairies.

“Put a drone over one of those dairies, it’s mud,” says Steven Hughes, the natural foods investor. “If you go to a grass-fed dairy, it looks like Augusta National hasn’t been cut in three years.”

The Cornucopia Institute, an organic industry watchdog group in Cornucopia, Wisconsin, estimates that half the U.S. organic milk supply is now produced in dairies of 3,000 or more cows — farms like Boehning Dairy Farms, in the town of Muleshoe, in the arid panhandle of Texas. The farm isn’t open to the public, but anyone can take a virtual tour on Google Earth: 13 long, narrow barns, their shiny metal roofs glinting in the Texas sun, surrounded by brown feedlots. Nearby, waste collects in open manure lagoons, each the size of several Olympic swimming pools, releasing methane as the manure decomposes. Bright green irrigated crop circles surround the dairy where, on a different day, perhaps, the cows could be seen grazing.

Among the dozens of dairy farmers and industry experts with whom I spoke, there’s a widespread belief, bolstered by reporting from The Washington Post, that lax USDA enforcement has meant that not everyone who sells into the organic market abides by its standards. The major complaint revolves around none other than grass, and whether cows at the largest dairies spend the necessary time on pasture.

Thicke, who until recently served as a member of the National Organic Standards Board, an advisory body for the USDA Organic seal, acknowledges the concerns. “Some of us who have been doing this for a while are frustrated that the USDA isn’t doing more to enforce the grazing rule,” he said. Many organic farmers still produce milk of excellent quality — the Cornucopia Institute offers a scorecard rating each dairy brand based on its production practices — and Thicke worries that the laxity of enforcement has done irreparable damage to consumers’ trust in the label. He’s part of a group working on an additional certification, the Real Organics Project, intended to point consumers toward the highest quality organic products.

Despite all this, for a long time, the demand for organic milk was brisk enough that small organic farms could still remain profitable. That came to an end two years ago, when organic dairy’s explosive sales growth stalled. Some farmers blame the rise of plant milks, now a $1.6 billion category and growing fast; others say that extremely low prices for conventional milk have discouraged shoppers from trading up for a much more expensive organic product.

Though organic dairy prices haven’t changed much in grocery stores, farmers are earning about 25 percent less for their milk than they did in 2016. At least 40 small organic farms in New York state lost their contracts altogether at the end of 2018. The rumor is they’ve been replaced with milk trucked in from the Midwest, or even Texas.

“The old mantra of ‘Get big, get out, or go organic’ worked well for family farms for 20 years,” Mark Kastel, the co-founder of the Cornucopia Institute, told me. “It should continue to work well if the laws are enforced. What used to be the lifeline if you wanted to operate a family-scale farm has been stolen.”


Today’s grass-fed dairy sector looks a lot like organic dairy did in the 1990s: mostly small farms looking to stay small, philosophically committed to a certain way of making milk. The question now is whether it will stay that way.

As with claims like “natural” and “healthy,” the term “grass-fed,” when applied to dairy, isn’t regulated by the federal government. That makes it especially vulnerable to abuse, and the two market leaders in grass-fed dairy products — Maple Hill Creamery and Organic Valley — have become frustrated by what they view as spurious claims cropping up on grocery shelves.

“When you go to the supermarket and see ‘grass-fed’ all over the place, are they doing real, fully grass-fed milk?” asks Adam Warthesen, who heads government relations for Organic Valley based in La Farge, Wisconsin. “We’re pretty sure they’re not.”

The companies are taking measures to protect the terminology. They spent the past two years developing a new Certified Grass-Fed Organic mark, which will begin to show up on packaging soon. In addition to all the standard USDA Organic criteria, products that bear the mark must come from cows that get 100 percent of their nutrition from grass; during the grazing season, two-thirds of that grass must be fresh, as opposed to stored hay.

Warthesen says the certification process and inspections will be overseen by a third-party organization called the Organic Plus Trust. Currently, all 340 farms that supply Maple Hill Creamery and Organic Valley have been certified, including Grazeland Jerseys. Going forward, any brand that certifies its grass-fed practices through the Organic Plus Trust can use the seal on its products.

Jon and Miranda are pleased about the new standard, and seven years into things, they’re encouraged by signs of progress on their farm. Soil samples show that the topsoil is, in fact, regenerating; in just two years, there have been measurable improvements in the carbon content. Thanks to healthier grasses, their grazing season has lengthened by a month, which means they don’t need to buy as much hay. They’ve even seen a return of native grassland birds to the area.

“We now have a whole farm focus, not just how much milk is in the tank, but with the grazing, we’ve seen our land improve,” Miranda told me. As soil fertility increases, the same land will produce enough to feed more cows, who will, in turn, enrich the land and improve the farm’s profitability. There’s a glimmer of a virtuous circle ahead.

Later that April morning, after the cows have been fed and their water replenished, Jon and Miranda take me inside the barn to admire the new calves. They push their wet noses into our hands. The Powers take turns running through the litany of issues that keep them up at night, most of which revolve around financial well-being. For all of the grass-fed dairy’s advantages, it does not currently provide a living wage for the farmers who produce it.

What consumers are willing to pay for their fancy milk seems to be relative: When the price for a gallon of conventional milk plummets, as it has, organic and organic grass-fed must adjust, too. In keeping with the market, the Powers have watched their pay price decline by more than 18 percent over the past two years. It’s still more than mainstream organic farms are getting, but the profitability is as bad, or worse. Grass-fed cows produce much less milk and require much more land to support them. Early estimates from the University of Vermont run around 6 acres per cow, whereas an organic confinement dairy might have 10 cows per acre. “There’s no island in this game,” Jon tells me.

Milk prices tend to be cyclical, and Jon and Miranda worry about how long it will take for them to come back up this time around. They worry about the trucking fees they pay for their milk, growing by the year, and about the rising cost of health care. Miranda is working off the farm three days a week now to supplement the family’s income, so they milk the cows at 4 a.m. before the boys get up for school.

They worry about how, come summer, when the hay must be mowed and bailed, they’ll manage to get it all done each day. Most of all, they worry about whether that shiny new Certified Grass-Fed seal will end up with the same soft spots as Certified Organic, whether loopholes and lax enforcement issues will, sooner or later, whisk the promise of a stable living away from family farms like theirs.

“I know they’re working really hard for that not to happen,” Miranda says. “I just hope they have a really good lawyer going through it.”

Elizabeth Dunn is a James Beard Award-nominated writer working at the intersection of food, business, and innovation. Her stories appear in The Wall Street Journal, Bloomberg Businessweek, Entrepreneur, and a variety of other publications.



Elizabeth G. Dunn

NYC-based journalist covering food + innovation. Professional writer, amateur mother. www.elizabethgdunn.com