The complainant against the ad, which ran 30 November 2016, believed that dairy farming was not good for the land and challenged Arla’s claim on the grounds that it was misleading.
But early this morning, The Telegraph reported that the NFU Dairy Board chairman Michael Oakes found the ruling "disappointing" and "frustrating".
"It's been a long-held belief that that organic farming does hold benefits," he said.
"We are frustrated with how the ASA works, and we'd be really interested to learn how they reach these decisions."
Arla Foods explained to the watchdog that the advert referred to organic product and organic farming methods, which were founded on good treatment of the land and sustainable farming. This included the use of renewable sources and the protection of non-renewable resources.
The brand stated that all their famers were certified organic by relevant independent associations and provided the Soil Associations organic standards document in support of the claim.
The ASA however concluded that consumers would interpret the claim "Good for the land … helping to support a more sustainable future" to mean that the "production of the advertised organic farm milk was undertaken in such a way that it would have an overall positive impact on the environment, taking into account its full life cycle".
While acknowledging that Arla had provided evidence regarding organic farming methods, the ASA did not believe that they had substantiated that organic milk production had an overall positive impact on the environment, taking into account its full life cycle.
The ASA therefore concluded that the claim was misleading.