Going organic: Demand for dairy goods from farms that avoid antibiotics and growth hormones is soaring, and consumers are willing to pay the price.
San Francisco Chronicle
George Raine, Staff Writer
Surrounded by cows in one of organic dairyman Tony Azevedo’s pastures, visitors from the city are struck by a sound most of them have never heard — stereophonic munching.
The cows are eating ryegrass, clover, alfalfa — as many as 70 different grasses, many of them planted by Azevedo. Others are volunteers that came in on a welcome Central Valley breeze. The munching of these 1,000-pound animals sounds like a room full of kids wolfing down cereal.
“I like that sound,” Azevedo said. “It must mean all is right in the pasture.”
Consumers must like it as well. Sales of organic milk are climbing in California and the nation as the organic industry steps up its marketing of farming that eschews antibiotics, synthetic hormones and genetic engineering.
Organic dairy farmers will tell you that consumers want to see cows grazing in a natural habitat, not confined with mounds of feed, getting injected with a synthetic growth hormone for greater milk production.
It doesn’t matter to growing numbers of people that organic milk costs more than milk produced by conventional dairies. And that price gap has narrowed in recent months as milk prices soared.
In May, 2.4 million gallons of organic milk were sold in California, a 19.4 percent increase from the year before. During the same period, total California milk production increased only about 3 percent.
Organic production still pales compared with the 60 million gallons of milk sold in the state each month. The California Department of Food and Agriculture began tracking organic milk sales only a year ago. Before that, the agency deemed production too insignificant to follow.
“Consumers want not only to know that milk is USDA-certified organic, but it’s just as important to them to know how animals are treated, how farms are being compensated, how land that produces the product is being managed, and that the product is highest quality,” said Marcus Benedetti, president of Clover Stornetta Farms in Petaluma, which buys from 33 North Bay dairies, 15 of them organic.
Nationally, the Organic Trade Association’s 2006 manufacturer’s survey showed U.S. retail sales of organic dairy products totaled $2.14 billion in 2005, the most-recent data available, up 24 percent from 2004 sales. Of that, milk and cream sales totaled $1.06 billion, up 25 percent from 2004.
At Colorado’s Horizon Organic, the nation’s leading vendor of organic dairy products, organic milk sales have increased 20 percent over a year ago, spokeswoman Sara Unrue said.
Azevedo, 55, is a man with an infectious hail-fellow, well-met manner. Twelve years ago, he became the first organic dairyman in the San Joaquin Valley. Today he milks 350 cows among his herd of 800 animals and raises crops on 400 acres.
“You are what you eat, correct?” he asked. “If you are producing food without antibiotics, without chemicals, without pesticides, that does have to have some kind of impact on the end product.”
There’s the rub. Conventional dairy operators take umbrage at the suggestion that organic products are superior.
“Milk is milk,” said Michael Marsh, the chief executive officer of the trade association Western United Dairymen in Modesto. “Organic producers, in their marketing, are trying to exploit a niche in the marketplace by effectively disparaging all other products in the marketplace.”
The food and agriculture department conducts random, unannounced sampling at diary farms and at milk processing plants, both organic and conventional, four times every six months, spokesman Steve Lyle said. Raw milk is subjected to a variety of tests, including coliform bacteria count, antibiotics and temperature. Conventional dairy operators insist that if their milk and organic milk both pass, then the two must be indistinguishable.
Several events in recent years have propelled organic milk sales.
Azevedo, who serves as president of the Western Organic Dairy Producers Alliance, said the December 2003 discovery of a single dairy cow with mad cow disease in Washington state “sent my sales through the roof.”
Benedetti said that in the late 1990s, consumers recoiled at the use of a synthetic bovine growth hormone, rbST, at some conventional dairies. The hormone sustains lactation by stimulating cows’ appetites so they eat more and produce more milk, as much as an extra five quarts per day.
“Our constituency is the most educated, most affluent, most sophisticated consumer anywhere in the world,” Benedetti said.
Producers such as Azevedo get about $22.50 for 100 pounds of milk — about 11 gallons. The price has gone as high as $27. But the market has recently given conventional dairy producers a major boost, while prices paid to organic dairies have stayed roughly the same.
Chief among the forces pushing up prices is the diversion of corn to ethanol plants, which Point Reyes Station dairyman Bob Giacomini said has increased the cost of his feed by 40 percent in the past nine months.
With conventional milk prices rising, organic producers are not getting the significant premium they are used to. If that difference doesn’t increase again, “You would start to see people getting out of the organic business,” said Giacomini, who sells milk from both conventional and organic operations.
Azevedo can’t imagine organic dairy operators defecting. He says organic dairymen are committed to their way of production.
Under federal regulations, organic farms must use organic or untreated seeds and apply no prohibited materials for three years prior to certification. They must use 100 percent organic feed and avoid antibiotics, growth hormones or genetically modified organisms. They also must provide access to pasture.
People on all sides of the organic debate say the access regulation has a loophole large enough to drive a milk truck through.
Access to pasture can mean anything, said Azevedo, whose cows are on pasture 280 days a year. The Western Organic Dairy Producers Alliance is urging the government to set a standard minimum of 120 days for cows to be on pasture. During that period, 30 percent of their diet must come from pasture, not feed, according to the alliance’s proposal.
Some suspect that a few organic-certified producers are cutting corners, said Mark Kastel of the Cornucopia Institute in Wisconsin, an organic watchdog group.
The success of the organic approach is “threatened by powerful economic interests that covet their share of the organic pie and who are willing to twist, manipulate and even ignore federal organic regulations in their rush to cash in,” Kastel said.
But there has been only one sanction of a major dairy. In May, the certification of the Vander Eyk Dairy, a 10,000-cow operation in Tulare County, was suspended. The dairy was found to be violating some provisions of federal organic regulations and it failed to correct them, USDA spokesman Billy Cox said.
“Anytime something becomes successful, there are people who want to find an easier way to do it,” Azevedo said. “Unfortunately, there are no shortcuts in producing organic foods.”
Azevedo, the son of a Portuguese immigrant dairyman who ran the family operation near Stevinson as an early version of an organic farm, says he’s no organic poster boy.
Scoliosis has hunched his back. He smokes Camel filters. He dresses like a cowboy. But his story explains his passion for organics.
As early as the 1960s, he and his dad, Antonio, who emigrated from the Azores, sometimes visited as many as four farm auctions a weekend, at which dairy equipment, family furniture and everything else people owned was for sale. Two- and three-generation dairy families met the economic reality of “get big or get out,” and they either added more cows or sold out.
Azevedo, who with his wife, Carol, bought the farm, the Double T Acres, from his dad in 1971, kept the family business afloat in part by staging weddings. They continue to operate a museum honoring agriculture on the property — the Double T Acres Ag Museum.
From 1971 to 1995, he ran the dairy conventionally, using chemicals. But he wasn’t happy. By the mid-1990s he was also not “cash-flowing.”
Azevedo told himself he did not want to be the generation that sold out.
“I saw the impact. I saw the look in their faces and how they felt responsible for losing the farm,” said Azevedo. “These were friends, neighbors, family. They had to take jobs in town. The reality was they were not responsible. They just did not get paid enough for what they did.”
Not knowing the word organic, Azevedo had an idea that if he made natural milk without using pesticides he might find a niche.
In 1994, he was approached by Organic Valley Family of Farms, which boasts on its Web site that it pays farmers 40 percent more than what conventional farmers get.
His 27-year-old son, Adam, runs the dairy now, freeing Azevedo to travel promoting organic dairies. He went to Washington this year to lobby for organics in the 2007 Farm Bill.
Azevedo was mingling with his cows before the 11 a.m. milking the other day. He gets six gallons per cow per day, compared with 10 gallons at conventional dairies. He pondered his life this far.
“I think people who say agriculture is romantic are right,” he said. “If you figured out what I am worth in cattle and land and equipment, even with organic prices being what they are I am only getting 2 percent of my investment. So it must be romantic. It must be a way of life that is in your blood and that you like, you enjoy.
“And to me, it’s what is the fewest number of cows to milk in order to make a living.”