Organic dairy producers have filed multiple lawsuits against the federal government, arguing that a long-standing milk pricing system unfairly forces them to subsidize conventional dairy products.
The legal action targets the U.S. Department of Agriculture and its Federal Milk Marketing Order (FMMO) program. The system, first created in the 1930s, sets minimum prices for milk and pools revenue across dairy producers.
Members of the Coalition for Organic Dairy Exemption, known as CODE, say the structure does not account for the differences between organic and conventional milk production. They are seeking two main outcomes: exemption from the FMMO system and compensation for what they describe as years of unfair payments into the program.
Three federal court filings challenge the constitutionality of requiring organic producers to participate in the pricing system. A separate class action claim seeks repayment for six years of contributions that farmers say did not benefit them.
Elvin Ranck, a Pennsylvania organic dairy farmer involved in the case, said the current system redirects money generated by organic milk sales to conventional producers. He described the arrangement as a financial loss for organic farmers who continue to pay into a pool they do not draw from.
Organic dairy accounts for more than 10 percent of U.S. dairy farms. Its share of fluid milk sales has grown from 1.9 percent in 2006 to 7 percent in 2025, according to industry data cited in the filings.
Despite that growth, the lawsuits argue the FMMO system has not been updated to reflect the rise of organic dairy. The program treats all milk as interchangeable in pricing and pooling, even though federal regulations require organic milk to be produced, processed, and handled separately.
Organic producers also face higher costs, including feed expenses and stricter regulatory requirements. Industry groups say the current pricing structure removes resources that could otherwise support expansion to meet rising consumer demand for organic products.
The legal filings follow years of attempts by organic dairy advocates to address the issue through administrative channels. According to CODE, proposals submitted in 2015 and again during a national hearing in 2023 were not advanced by the USDA. Additional objections raised in 2024 and 2025 were also rejected or remain unresolved.
The lawsuits do not seek to dismantle the FMMO system entirely. Instead, they call for a narrower change that would exclude organic dairy from a program originally built for a different type of industry.
CODE members argue that federal law already recognizes organic products as distinct, and say pricing policies should reflect that distinction as consumer demand for transparency and traceability continues to grow.