US farming pressure group The Cornucopia Institute has slammed a government ruling that a controversial Dean Foods dairy is operating within organic standards.

The US Department of Agriculture has closed its investigation into Dean Foods' Horizon dairy in the US state of Idaho. The probe came after a legal complaint from Cornucopia last year that the dairy was violating regulations covering organic farming.

"We know from our visit to the Idaho facility that [Dean Foods] had no functional pasture meeting legal requirements and were unable to graze their huge dairy herd," said Mark Kastel, the institute's co-director.

The institute has been vocal in its claims that dairy processors in the US have circumvented organic standards. In August, the largest organic dairy in the US, Aurora Organic Dairy, agreed to stop using the organic label on some of its milk after the US government threatened to tear up its organic certification. The deal came after numerous complaints from the institute over Aurora's practices.

Some in the organic farming community, however, remain angry at the US government for "siding with factory farms".

"This is the second time in two months that the USDA has sided with the operators of factory-farms, ignoring their impact on the reputation of the organic label, the economic damage they are doing to ethical, family-scale organic dairy farmers and the sham they are perpetrating on consumers who want to believe in the organic label," said Jim Goodman, an organic dairy farmer in Wisconsin.

Officials at Dean Foods could not be reached for immediate comment.