Butler attributed the primary cost differences between organic and conventional operations to reduced milk production, slightly higher feed and labor costs, and significantly higher herd replacement and transition costs. Herd replacement costs were significantly higher for organic producers because replacement heifers must be raised organically, or must be purchased from organic heifer breeders. Transition costs were not obtained directly from farmers, but instead were imputed as the net income foregone during the transition period from selling milk at the conventional price while incurring the higher costs of complying with the organic requirements. .
