WASHINGTON, D.C. — Organic dairy interests announced that they filed federal lawsuits on April 28th, challenging the constitutionality of their required participation in the Federal Milk Marketing Orders (FMMOs). In one filing, they seek exemption from the system and in a second filing more than $60 million in damages they say was paid into pools over the past six years without return.

The lawsuits, filed by members of the Coalition for Organic Dairy Exemption (CODE), including Aurora Organic Dairy, Horizon Organic Dairy, and CROPP Cooperative / Organic Valley, argue the USDA is forcing organic milk into a pricing and pooling structure designed for conventional dairy.

“The federal government has locked in an updated dairy pricing regulation that actively harms organic dairy farmers. It systematically siphons revenue generated from organic dairy sales and redistributes it to non-organic dairy producers and their partners. This is effectively a government taking,” said Elvin Ranck, an organic dairy farmer plaintiff near Mifflin, Pennsylvania.

In a press announcement by CODE, Ranck stated that the CROPP Cooperative, of which he is an owner-member, pays millions each year into the FMMO pools, “yet those dollars never return to organic farmers like me, and under the current system, they never will. At some point, we have to stand up for ourselves.”

At issue is how organic milk fits — or doesn’t — within a system built on the assumption that milk is interchangeable. Plaintiffs argue that organic milk must be segregated under federal standards and carries higher production and handling costs, yet is pooled and priced alongside conventional milk.

That tension is focused on the fluid market. Under FMMO rules, Class I fluid milk must be pooled, except for plants that meet the 350 million pounds per year small plant or producer-handler threshold exemptions. This requirement draws organic fluid milk into the pool even though it is marketed under separate contracts and pricing.

Plaintiffs argue the result is a mismatch that redistributes value away from organic producers.

According to CODE, 10% of U.S. dairy farms are certified organic, and organic Class I fluid milk sales have grown from being a 1.9% share of total fluid milk sales in 2006 to 7% in 2025.

In practice, most organic milk is priced outside the FMMO system through private contracts at premiums above federal minimums. That means the FMMO blend price has little role in determining organic farm pay, but the organic handlers must still pay into the pool.

The lawsuits follow years of unsuccessful efforts to address the issue through USDA’s administrative process, including proposals dating back to 2015 and testimony during the 2023 national FMMO hearing.

A year ago (May 2025), members of CODE filed 15A petitions with USDA for an exemption, arguing that under federal law and USDA regulation, organic milk processors cannot substitute or otherwise use conventional milk in their organic milk products. Yet FMMOs treat the products as interchangeable and make no distinction between organic and conventional milk.

The CODE petition at the time argued that the general performance standards (e.g., a minimum shipping percentage of milk) that otherwise can encourage delivery of milk to handlers for fluid use (known as performance standards) do not specifically apply to or differentiate certified organic milk from conventional milk.

“USDA has repeatedly failed to consider the views of organic dairy throughout the FMMO rulemaking process, denying organic dairy a seat at the table and effectively leaving organic dairy out of decisions that impact our ability to operate,” the petitions filed with USDA a year ago stated.

Now, the April 28 court filings bring the dispute to federal court, although the coalition did not specify the districts in its announcement, and a review via Pacer did not yet contain those details.

While the plaintiffs are not seeking to dismantle FMMOs, but are asking for exemption and compensation, the organic case may test the participation standard in a new way.