Fair to the cow or fair to the farmer? The preferences of conventional milk buyers for ethical attributes of milk

Conventional dairy farming has been under pressure for lacking animal welfare, biodiversity loss through abandonment and intensification of grassland, and low milk prices during the 2015/16 milk price crisis. The relatively stable organic milk prices during the milk price crisis indicate that consumers have preferences for product characteristics besides the price. We investigate through a choice experiment the willingness-to-pay (WTP) of German conventional milk buyers for ethical attributes of milk production that address the above mentioned concerns. Respondents have the highest WTP for animal welfare - free-stall plus summer pasture - followed by biodiversity conservation, support for small, below-average income farms, and regional milk production. Respondents also have a positive WTP to support all farms but only in combination with regional production. We further find a positive WTP to support small farms in combination with tethering. This implies animal-welfare concerns are somewhat counterbalanced by fairness aspects. Our insights may support developing labels and agri-environmental policies concerning ethical aspects of conventional milk production.