ORGANIC MILK GOES SKY HIGH

Organic milk prices headed higher, Dean Foods CEO says

04:07 PM CDT on Wednesday, April 30, 2008

By KAREN ROBINSON-JACOBS / The Dallas Morning News
krobinson@dallasnews

The price of organic milk, which sank last year as increased supplies flooded the market, is headed back up, the nation’s largest dairy producer said early Wednesday.

“Prices are going to have to move up,” Gregg Engles, chairman and chief executive of Dallas-based Dean Foods Co. told analysts. “It’s under way, and it’s industrywide.”

Dean owns the best-selling Horizon Organic milk brand. Last year, Dean and other milk producers lowered prices to compete during an uncharacteristic period of oversupply.

But with organic feed costs soaring, some organic dairy farmers are pulling out, leading to a drop in supply and the edge up in prices.

In some markets, a half-gallon of organic milk could be found for $3 last year. Today, the price is closer to $3.60 or $3.80, Dean executives said.