Just on the heels of Dean Foods’ announcement that they will invest $10 million to build a second factory-scale company-owned farm in the desert-like conditions of at Idaho, we’ve learned of another proposed 10 million-dollar investment, adding 2000 cows, to the cachet of “organic” industrial farms producing milk for Dean/Horizon. Besides for eating byproducts from vegetable processing, these cows will be “pastured” in an area of eastern Washington that gets, we are told, approximately 7 inches of annual rainfall. Organic? Ecological? Acceptable to organic consumers–questionable.

Mark Kastel, Senior Farm Policy Analyst
The Cornucopia Institute

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Paterson Dairy Takes Home-grown Approach to Milk

Published Saturday, January 14th, 2006
By Jeff St. John, Tri-City Herald staff writer

Watts Brothers Farms and Frozen Foods is planning to build a $10 million, 2,000-cow organic dairy in the Horse Heaven Hills, a move that could catapult the Paterson-based company into a lead role in the rapidly growing organic milk industry in Washington.

The massive new dairy under review by Benton County officials could represent a doubling of the state’s organic milk production, which has been growing by leaps and bounds to meet booming consumer demand.

With plans to use the pasture-fed cows’ manure to fertilize the company’s Paterson farm row crops in south Benton County and use leftover vegetable matter as cattle feed, the new dairy also would represent a “more natural and holistic” approach to the dairy business, said Don Odegard, Watts Brothers president and operations director.

“It’s exciting to bring this to Benton County,” Odegard said Friday on a helicopter tour over the site for the dairy, about 40 miles southwest of Kennewick.

“It’s a dairy that’s going to be operating organically, with pasture-fed animals, on a farm that’s dedicated to balancing its nutrients.”

Watts Brothers plans to market the dairy’s milk through Horizon Organic, the nation’s market-share leader in organic dairy products, Odegard said.

With plans to begin operations in December and increase to full production during the next two to three years, the dairy could be producing about 31 million pounds of milk per year at full production — about 2 percent of Horizon Organic’s current nationwide production, said Jule Taylor, Horizon’s director of milk supply.

Organic milk accounts only for about 3 percent of overall milk consumption in the United States, Taylor said — but the organic dairy industry has been growing at an annual rate of 20 percent or more for a decade.

That’s despite the fact that the price for organic milk in stores is about twice that of nonorganic milk, said Caragh McLaughlin, Horizon’s senior brand manager.

That price difference applies to organic milk producers as well, who typically can command double the prices seen by nonorganic dairies, said Katherine Withey, organic program specialist with the Washington state Department of Agriculture.

Washington has about 20 dairies with about 2,000 milking cows either operating as an organic dairy or seeking organic certification, Withey said. That’s a mere fraction of the 237,000 dairy cows in the state, according to figures from the Washington Dairy Products Commission trade group.

But considering there only was one organic-certified dairy in the state in 2001, that represents a huge growth in organic dairies.

“Washington is having incredible growth in organic certified dairies,” she said. “It’s an exciting alternative marketing opportunity.”

Watts Brothers hasn’t yet applied for its organic certification from the state, but has been working on the process and has been certified to grow organic crops for some time, she said.

The Watts Brothers dairy, if built to plan, also would be one of the largest, if not the largest, organic dairies in the state, which typically have about 200 cows, noted Jay Gordon, executive director of the 600-member Washington State Dairy Federation.

Gordon, who is himself applying for organic status for his family dairy, sees the addition of a major new player in the business as a good step for the state’s organic dairy industry.

While the shortage in supply has kept prices high for organic dairies, there’s a potential downside to letting the imbalance continue, he said.

“There is concern that at some point consumers are going to say, ‘I won’t pay that much,’ ” he said. “We need to keep supply and demand in balance.”

That’s one of the factors Odegard cited in Watts Brothers’ decision to move ahead with its dairy, which has been in planning for about two years now. The 250-employee company expects to hire about 22 more people to run the dairy.

Of course, as Horizon’s Taylor noted, “Organic milk is not just something you can flip a switch and within a day or two have a supply.”

Cows are required to spend one year under organic conditions — eating only organic feed and receiving no hormones or antibiotics — before being certified as organic. Pastures must spend three years without application of pesticides or unapproved fertilizers to be cleared for organic status, Odegard said.

Besides meeting the organic certification rules laid out by the U.S. Department of Agriculture, Watts Brothers’ new dairy will stand out in a number of ways, Odegard said. For one, it will use Jersey cows, rather than the more typical, larger Holstein breed, and will milk them less often.

That will lead to “significantly lower” volumes of milk produced per animal, he said, but also will extend the productive life of the animals to up to 10 years, rather than the more typical two years, he said.

“The philosophy we have is, it’s not all about milk production,” he said. Watts Brothers also plans to treat its dairy cows’ manure to retain its nitrogen content, increasing its value as a natural fertilizer, he added.

“By handling it properly, you reduce the amount of synthetic fertilizer you have to truck out to the farm,” he said. With synthetic, natural gas-derived fertilizer spiking in price in recent years, that should save the company a good deal of money, he said.

Likewise, by using the 50,000 tons per year of vegetable matter Watts Brothers turns out of its Paterson food processing plant, which it now ships to other dairies as cattle feed, and using it instead for its own dairy, the company expects to keep trucks off the road and increase its efficiency, he said.

The company is seeking a conditional use permit from Benton County to build the dairy, and the plans are under environmental review.

Along with the Watts Brothers’ plan to start producing organic vegetables next year — about 7 percent of its annual output of about 120 million pounds of peas, corn and carrots in the first year and increasing in coming years — Odegard said he’s hoping to prove that “farming organically can be done very successfully.”

“The consumers have made it very clear that they want organic products,” he said. “We’re trying to make their organic products more affordable.”

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