Abstract
In an effort to combat their environmental footprint, leading associations in the United States dairy industry have committed to implementing new technology in manure management and achieving Net Zero production by 2050. These pledges can increase the cost of producing milk, but it is unclear if these production changes can garner price premiums from consumers. This study uses a choice experiment to analyze consumers' preferences for a gallon of milk described by four attributes: organic production, GHG emissions reduction, nutrient runoff reduction, and price. An online survey was administered across four U.S. regions to individuals who regularly purchase milk from grocery stores. We find evidence of heterogeneity in preferences and conduct several market segment analyses. A consumer segment characterized by higher socioeconomic status and environmental attitudes shows substantially higher WTP for organic production and GHG reductions than a lower-socioeconomic-status, less environmentally engaged segment, which actually exhibits disutility from organic production. A secondary analysis suggests that education is the main determinant of increased WTP for organic production, while environmental attitudes likely drive WTP associated with GHG reductions.
•U.S. consumers' willingness to pay for sustainability-differentiated fluid milk is estimated using a choice experiment.•Respondents value organic production and greenhouse gas reductions more strongly than nutrient runoff reductions.•Preference heterogeneity is substantial; two consumer segments identified via cluster analysis differ markedly in WTP for organic and GHG-reduction attributes.•Education is associated with a preference for organic while stated environmental attitudes dictate preferences for GHG reductions.