Published on 09/07/06

Milking the market: Organic loses to grass-fed

By Stephanie Schupska
University of Georgia

When Sweet Grass Dairy in Thomasville, Ga., was considering adding milk to its successful goat and cow cheese business, Desiree Wehner contacted the University of Georgia Center for Agribusiness and Economic Development.

The family-owned dairy wanted to know the best way to market their milk. Their answer wasn't exactly what either they or the center were expecting.

Before interviewing 674 respondents in the Atlanta and Tallahassee area about their personal milk preferences, "we figured their top pick would probably be organic," said CAED economist Kent Wolfe. The other two choices were locally produced milk and grass-fed milk.

Instead, consumers responded that they were more interested in buying grass-fed milk than either organic or locally produced products. They also considered the grass-fed milk more unique.

Wolfe thinks it has something to do with the mental image of "happy cows."

"Grass-fed milk conjured up the image of happy cows, that these cows have a better quality of life," he said. "I think that's what people think." That, he said, and many people are taking more interest in health issues.

Sweet Grass Dairy, which operates both a cow and a goat dairy, reflects this growing trend. Before changing to grass-fed milk and starting cheese production, they ran a conventional dairy.

Now, the family says they've completely changed the way their cows and goats live. Instead of spending their days inside or receiving hormones or stimulants, the animals "live outdoors, get exercise and enjoy grazing. Our philosophy is carried over to our goat herd as well."

In the past, this was reflected through the organic food label.

"Different factors are important to various consumer groups," Wolfe said. "Natural and other production characteristics can be more important to a consumer than true organic production. We found that even the locally produced milk is more important to this sample of Atlanta and Tallahassee consumers than the (U.S. Department of Agriculture) organic stamp."

Differences between the markets that CAED surveyed do exist. The Tallahassee respondents were much more interested in grass-fed milk than their Atlanta counterparts, who leaned more toward locally produced milk. But overall, the tendency was toward grass-fed.

On average, women were more interested in grass-fed milk than their male counterparts.

Other items CAED asked about were willingness to pay, willingness to pay a premium and uniqueness of the products. They also questioned participants about different kinds of cheese and fortified yogurt.

The Tallahassee and Atlanta areas were chosen because of their proximity to the Thomasville dairy, which is located in southwest Georgia.

As for Sweet Grass Dairy, the grass-fed title they plan to attach to their milk "is kind of unique," Wolfe said. "They're probably the only one in the state going under that label."

A secondary result of the study, he said, was that the dairy decided to put in a facility to process their grass-fed milk on the farm.

Stephanie Schupska is the communications coordinator with the University of Georgia Honors College.