The supply chains of cow grass-fed milk

For over 30 years, the EU dairy sector has operated within the framework of milk quotas, which were introduced in 1984 to address the problem of surplus production. Their abrogation in April 2015 and the high volatility of milk prices, led the milk market to question the sustainability of its production models. Herding about 130,000 dairy cows and with a yearly production of around 840,000 tons of milk, Piedmont is an important Italian dairy region. Although milk is mainly processed by the dairy industry, the interest in a high-nutritional profile product, produced by small farms foraging cows only herbage and hay, is on the increase. After an overview of the Italian and international milk market, this chapter analyzes some representative grass-fed milk production systems. It then goes on to report some consumer surveys on the perception and inclination to consume grass-fed milk and related products and on consumers’ willingness to pay for them. Lastly, it reports on a longitudinal case study done on a new business model that shifts from the traditional production model to a differentiation-oriented one, with an increased portfolio of products derived from grass-fed milk.