Is conventional milk getting a new stigma attached to it?

If a dairy farmer could stand by every dairy case in America, we would have some really educated consumers. They would know exactly what each label on the many gallons of milk meant. But since dairy farmers are usually too busy working around the clock, grocery shoppers read the label and make their own assumptions as to what happened to the milk before it got there. Unlike 10 years ago when milk was skim, 1 percent, 2 percent, or whole; today we still have those options in addition to organic, rBST-free, and likely more.

“It’s all just marketing!” you might say. But are these niche-marketing labels best for the greater dairy industry? In the July issue of the American Journal of Agricultural Economics, researchers from the University of Wisconsin and Cornell published an article titled “Does Production Labeling Stigmatize Conventional Milk?” Read it here. In short, the article says yes it does. The group set up an experiment to measure consumer’s willingness to pay for variously labeled milk. Citing the paper, results “indicate a substantial stigma effect” from both organically labeled and rBST-free labeled milk. The report says that the net economic result for producers can be negative since consumers may decrease their willingness to pay for the conventional product that dominates the market, while products with other labels have a relatively small market share. What do you think?