The dairy industry was among the hardest hit by the economic downturn, and the outlook for 2010 is only slightly less grim. Milk prices in freefall from the recession coupled with oversupply continue to take their toll on dairy farmers—particularly small, family-run organic operations.

‘It’s very bleak,” says Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, which represents about 750 farmers.

The good news: Industry experts expect milk prices to stay flat or improve slightly this year. Meanwhile, larger dairy companies are stepping up efforts to find strategies to draw and keep customers looking for the best deal.