Got organic milk?

An oversupply of fancy organic milk means it’s being priced less than the regular stuff in some parts of the country.

Companies such as Dean Foods, the largest U.S. dairy processor and distributor, are being forced to lower prices on organic milk brands.

A regulatory change and favorable prices led more farmers to produce the organic milk and caused an industry-wide oversupply.
 
“There are some parts of the country right now where there is deep discounting of organic milk, where the price of organic milk may indeed by lower than the price of branded conventional milk,” Chief Financial Officer Jack Callahan said during a conference call.

Organic milk is typically more expensive for consumers, but the glut in the market has forced retailers to not only lower prices but expand marketing and distribution, thus increasing costs, to unload the oversupply.    
At the same time, rising regular milk prices are putting a pinch on Dean’s earnings.

“It’s sort of a unique confluence of two different issues happening at the same time with commodity prices rising to all-time highs and this glut of organic milk,” Callahan said.