About once a week the phone rings at the Dill Pickle Food Co-op in Chicago’s artsy Logan Square neighborhood with the same question: Got milk? Organic, to be exact.

“I’ll have people call up and say, hey, I know the truck’s coming on Tuesday, can you put aside three half-gallons?” said Dana Bates-Norden, 33, who works as the buyer of perishable goods for the store, which in 2014 started selling out of the glass-bottled milk it gets from Midwest organic dairies within two days. “When I first started two years ago, I felt like I ended up having to write off a lot of organic milk, and now, I really can’t keep it in stock.”

Americans spent an estimated $35 billion on organic groceries in 2014. About $5.1 billion of that went to dairy, more than doubling from a decade earlier, data from the Nutrition Business Journal published on the U.S. Department of Agriculture website show. With retailers like Wal-Mart Stores Inc. trying to attract more organic-food shoppers while McDonald’s Corp. uses the milk — which can cost almost twice as much as regular — in some McCafe coffees, producers are struggling to keep up with demand.

Even in Wisconsin, the state with the most organic dairies, stores are posting signs warning of shortages, the USDA has said. At Fresh Madison Market in the state’s capital city of Madison, sales of the milk have doubled over the past year and rising demand spurred a 10-day shortage in early January, owner Jeff Maurer said by telephone Feb. 9.
 

‘More Educated’

“You’ve got customers that are more educated on the benefits of organic,” Jim Hyland, a spokesman for Milwaukee-based Roundy’s Supermarkets, said in a Feb. 3 telephone interview. Some of the company’s 149 stores in Wisconsin and Illinois had shortages of the milk in 2014, even though store space allotted to organic dairy products has doubled over the last five years. This “is not something that’s going to shrink,” he said. “It’s only going to increase in demand.”

It’s not just hipsters going organic. About 45 percent of Americans seek out organic foods, according to a Gallup poll released in August. At Chicago’s Dill Pickle, the customers range from younger singles to families with children and older buyers, Bates-Norden said.

Sales of organic milk jumped 9.5 percent in the first 11 months of 2014 to 2.26 billion pounds, the latest USDA data show. By contrast, consumption for the regular variety is slowing, with demand down 3.8 percent. Purchases of conventional milk are still much larger than organic, though, with 43.49 billion pounds sold over the same period.
 

Prices Climb

Retail prices for organic milk climbed 8.4 percent in the 12 months ended Feb. 6 to $3.89 for a half gallon, according to the USDA. Conventional prices rose 14 percent to $1.92.

Here’s what consumers get for that $1.97 premium: Milk marketed as organic must come from cows that aren’t treated with hormones or antibiotics, and the animals must be able to graze on organic pasture and eat only organic feed — grains such as corn that aren’t genetically modified and haven’t been treated with certain chemical pesticides. All that is regulated by the government.

Turning a regular dairy farm into one that can get certified organic is lengthy and pricey.

Under current USDA regulations, the process can take three years as farmers convert the pastureland and feed crops. In the third transition year, farmers have to feed their animals organic-only feed, which can increase costs by about $365,000 at a 500-cow dairy, according to Andrew Dykstra, president of the Chico, California-based Western Organic Dairy Producers Alliance.