The price of organic milk, which sank last year as increased supplies flooded the market, is headed back up, the nation’s largest dairy producer said early Wednesday.

“Prices are going to have to move up,” Gregg Engles, chairman and chief executive of Dallas-based Dean Foods Co. told analysts. “It’s under way, and it’s industrywide.”

Dean owns the best-selling Horizon Organic milk brand. Last year, Dean and other milk producers lowered prices to compete during an uncharacteristic period of oversupply.

But with organic feed costs soaring, some organic dairy farmers are pulling out, leading to a drop in supply and the edge up in prices.

In some markets, a half-gallon of organic milk could be found for $3 last year. Today, the price is closer to $3.60 or $3.80, Dean executives said.

Discussion of the price hike came as Dean announced a drop of more than 50 percent in reported first-quarter profit, due in part to greater interest payments and rising dairy costs.

Profits were $30.8 million, or 21 cents a share, for the period ended Mach 31, down from $63.2 million, or 47 cents a share, a year ago.

Interest expenses jumped to $83.8 million from $52.2 million a year ago thanks to a $15 a share dividend paid to shareholders last April.

Higher raw milk costs also hurt profits. Excluding one-time events, Dean posted earnings per share of 23 cents. Analysts polled by Bloomberg, on average, expected a profit of 18 cents per share.

Revenue for the quarter gained 17 percent to $3.08 billion from $2.63 billion a year ago, boosted by passing through higher milk costs and strong sales at its WhiteWave / Morningstar division.