Organics at a Crossroads in 2007

By Mark Alan Kastel

Now that annual sales of organic food products have reached $16 to $17 billion, and increased marketplace demand is causing ramped-up offerings by major supermarket chains, can the organic industry retain the meaning behind the organic label? After all, no other product or market sector I know of better exemplifies the old marketing adage: “Sell the sizzle, not the steak.”

The organic industry has reached commercial viability through a unique and loving collaboration between farmers and consumers. For a change, farmers have been fairly compensated for their efforts. By and large, they control their own destinies by setting prices — the cost of production plus a reasonable profit.

Organic production has provided many families with a sustainable income — very unlike conventional agriculture, which has hemorrhaged farmers off the land as production has shifted to large industrial operations. Dedicated consumers have been willing to pay premium prices for food that reflected a different agricultural philosophy.

But all that might be about to break. For example, two major corporations, relying all or in part on industrial scale dairies for their milk supply and employing vertical integration as a means to reduce costs, now control between 60% and 70% of the organic milk market. Cornucopia’s research, including investigative site visits to 2000- to 10,000-cow “organic” factory dairies, revealed that they are ignoring important federal organic standards and confining their herds in feedlots rather than pasturing the animals as required by federal organic law. They routinely bring nonorganic animals into their herds to replace cows burned-out by their high-production management style. These tactics put ethical family farmers at a keen competitive disadvantage.

In addition to other industrial livestock facilities producing poultry and eggs, there has been a flood of imports driving organic growth, and in some cases driving down commodity prices: frozen fruit and vegetables from China and Central America, meat from Argentina or Uruguay and soybeans from China and Brazil.

We know why most shoppers initially purchase organic products, based on numerous industry surveys. They are concerned with the health and well-being of their families, especially children, as we all are. But our research shows that consumers think they are doing something not only for their own families but also for society. They think they are supporting a different kind of environmental ethic, a more humane animal husbandry ethic — and they think they are supporting economic justice for family farmers.

Producing “organic” milk on factory-farms in the desert West. Shipping in feed from hundreds or thousands of miles away. Pushing cows for high production, resulting in a stressful life and premature death. Exploiting hard-working Hispanic immigrants housed in trailers sandwiched between major highways and industrial feedlots, with their children suffering from epidemic levels of asthma.

None of these are organic practices, in the eyes of the consumer.

This will be a watershed year. On one end of the spectrum we have Wal-Mart, which is trying to change the definition of organic food to include “cheap.” They aim to deliver organic food at 10% above the cost of conventional by procuring products from factory-farms, imports, and a bevy of large agribusiness concerns with no prior history in organics.

On the other end of the continuum are the food cooperatives and Whole Foods Markets. They are ramping up their relationships with local and regional farmers to deliver authentic organic products. They are also reevaluating some of the major name brands that have been discredited and dropping them from their store shelves as consumers start to express their concerns.

Consumers will be the final arbiter in this debate. Corporations that disregard consumer’s ethical expectations stand to lose brand equity and are endangering the economic viability of the organic label for all. Last year we issued ratings of the nation’s organic dairy products based on the ethics of their milk procurement or production practices. We are currently working on similar rating scorecards for organic soy products, eggs, poultry and even wine.

This article first appeared in Food Traceability Report (February 2007 Volume 7, Number 2, page 18), copyright (c) Agra Informa, Inc., and has beenreprinted by permission, all rights reserved. For more information, go to www.foodtraceabilityreport.com.