Organic Milk vs. Conventional Milk

Based on our consumption experience, organic mild normally cost three or four times as much as conventional milk. Consumers are encouraged to buy organic milk because of the health issue and environmental benefits. However, this is not true anymore. The price difference between organic milk and the conventional milk is getting closer and closer. Conventional milk prices are getting pushed by several factors. For example, Australian drought, disappearing European subsidies, higher feed costs due to corn-based ethanol production and swelling global demand chief among them all increase the price of conventional milk. Meanwhile, the organic milk price has been dropping due to a one-year glut in production caused by farmers taking advantage of a regulatory grace period regarding feed requirements. According to the new regulation, starting next year, farms will have to go 100 percent organic. Farmers expect some cash inflow by competing with the conventional milk. The increase in supply decreases the price for organic milk. What do you think about the milk market? What do you think will happen after the 100 percent organic farm is built up?