Why is Walmart’s Organic Milk So Cheap?

Here’s how Walmart undercuts everyone… while still calling their milk organic.

If you are shopping on a budget, as so many of us are lately, you have no doubt noticed that Walmart’s organic milk is usually a few dollars less expensive than competitors’. Organic Valley milk from grass-fed dairy cows costs $6.67 in California and is also sold at Walmart. Whereas Great Value Organic milk, the Walmart brand, is a mere $3.97, lower even than many conventionally sourced half gallons.

The Industrial Organic Controversy

Michael Pollan, best-selling author of The Omnivore’s Dilemma, bemoaned Walmart’s entry into organics in 2006 in a piece he wrote at the time. He said they would lead to the industrialization of the organic industry.

“The industrialization of organic agriculture, which Wal-Mart’s entry will hasten, has given us ‘organic feedlots’ — two words that I never thought would find their way into the same clause,” he blogged at the time. "To supply the burgeoning demand for cheap organic milk, agribusiness companies are setting up 5000-head dairies, often in the desert. The milking cows never touch a blade of grass, but instead spend their lives standing around a dry lot ‘loafing area’ munching organic grain — grain that takes a toll on both the animals’ health (these ruminants evolved to eat grass after all) and the nutritional value of their milk. Frequently the milk is then ultra-pasteurized (a high heat process that further diminishes its nutritional value) before being shipped across the country. This is the sort of milk we’re going to see a lot more of in our supermarkets, as long as Wal-Mart honors its commitment to keep organic milk cheap.

“We’re also going to see more organic milk coming from places like New Zealand, a trend driven by soaring demand — and also by what seems to me, in an era of energy scarcity, a rather forgiving construction of the idea of sustainability. Making organic food inexpensive means buying it from anywhere it can be produced most cheaply — lengthening rather than shortening the food chain, and deepening its dependence on fossil fuels.”

The Aurora Organic Dairy Story

But that isn’t the entire story by any means. It is true that while Great Value Organic milk maintains official U.S. Department of Agriculture (USDA) certification, consumer advocates earlier accused Walmart’s primary suppliers of exploiting regulatory loopholes to prioritize industrial scale over traditional organic values. A significant portion of Walmart’s Great Value organic milk has historically been sourced from Aurora Organic Dairy, a massive, industrial-scale producer based in Boulder, Colorado.

Aurora Organic Dairy’s herd grazes on more than 17,000 acres of organic pasture across its company-owned dairy farms in Colorado and Texas. It also operates organic dairy processing plants in Platteville, Colorado, and Columbia, Missouri. (For the record, it does not appear that they operate any farms “often” or at all “in the desert,” as Pollan alleged.)

Legal Challenges and Settlement

The Cornucopia Institute and consumer groups alleged in a 2007 class-action lawsuit that the massive supplier was violating federal rules by keeping thousands of cows in industrial confinement with inadequate access to real pasture. The consolidated class-action lawsuits were resolved in 2020 when the company agreed to a $7.5 million settlement. The settlement, which contained no admission of wrongdoing, compensated consumers who purchased the milk. The settlement included store brands from Walmart, Target, and Costco, notes Cornucopia Institute and Top Class Actions.

The Eighth Circuit Court of Appeals and the district court confirmed that Aurora’s milk was properly labeled and sold as organic at all times, and that it has been certified as organic by a USDA-accredited certifying agent since 2004. As such, the only remaining action in this lawsuit, which was originally filed in 2007, concerned marketing claims made by Aurora and its customers, notes Dairyherd.com.

Notably, the USDA investigated Aurora and allowed the dairy to retain its organic certification after it modified its practices. Consumer pressure, in other words, made a big difference. And it seems for the better.

Recent Sustainability Improvements

Aurora provided an update on its organic progress over the prior three years in its 2025 Sustainability Report.

In 2023, the company’s farms implemented an organic feed additive to reduce enteric methane emissions from its dairy cows, reducing the climate impact of their dairy herds.

The dairy completed its fourth year of regenerative land management practices at its dairy farms to increase carbon sequestration and build healthier soils.

In 2024, the company installed its third solar array project at its organic dairy farm in Dublin, Texas. The system is expected to generate electricity equivalent to nearly 25 percent of the electricity consumed by the site’s batch-milking robotic parlor.

Supporting the Broader Organic Industry

Aurora is also important to the rest of the organic industry. By purchasing organic feed, bedding, and other commodities for its animals, the company supports an estimated 75,000 acres of organic farmland operated by approximately 75 independent farmers. In addition, the USDA requires that certified organic ruminants graze daily throughout their region’s growing season to meet strict National Organic Program (NOP) standards; they must graze for at least 120 days per year.

Each of its company-owned farms is dual-certified organic by USDA NOP-accredited certifiers and for animal welfare and worker conditions by Validus, an independent auditor.

The Loss Leader Strategy

But there’s another reason Walmart’s organic milk is so cheap compared to other brands. Walmart keeps its organic milk prices low to attract shoppers. In other words, milk is sold as a “loss leader,” meaning Walmart may sell it at or below cost to encourage customers to complete the rest of their grocery shopping at their stores.

The major personal health advantages of organically sourced dairy products still accrue to Walmart shoppers. That is, milk products are free of residues of antibiotics, growth hormones, and pesticides, making them superior to conventionally sourced dairy.