Aurora Dairy Threatens Suit Against Critics

October 12th, 2007

Boulder County Business Report (link no longer available)
by Barbara Hey

BOULDER – Despite threats of legal action, the vitriol continues between Boulder-based Aurora Organic Dairy and the company’s critics in the organic community – chief among them the Cornucopia Institute, a Wisconsin-based advocacy group.

The current conflagration concerns a consent agreement between the U.S. Department of Agriculture and Aurora released Aug. 29 following a “Notice of Proposed Revocation” in April, in which the USDA cited its intention to pull Aurora’s organic certification unless the dairy filed a written appeal within 30 days.

The notice cited a yearlong investigation by the Agricultural Marketing Service, a division of the USDA that found 14 “willful violations” of organic regulations primarily at Aurora’s operation in Platteville.

The violations focused on lactating cows not having sufficient access to pasture and improprieties in care and transitioning of “organic” cows. The USDA also rebuked the Colorado Department of Agriculture, the state’s organic certifier, for inadequacies in its operating procedures.

Instead of pursuing an appeal, which could have ended in court, Aurora started negotiating with the USDA. The result was the consent agreement, which preserved Aurora’s organic certification, but put the company on one-year probation.

To some that outcome seemed suspect.

“Aurora was essentially let off the hook,” said Jim Riddle, organic outreach coordinator for the University of Minnesota and former chairman of the National Organic Standards Board.

“When 14 counts are labeled ‘willful’ violations, that implies intent to break the law.” After a letter of this kind, the standard procedure is to file a written appeal, he said, which would be denied, or if settled, followed by a published report detailing why each of the counts were repudiated.

“When you compare the 14 items in the revocation to the consent agreement, they don’t match up,” he said. “That tells me there’s been political influence at the highest level.”

That sentiment is shared by the organizations to which Aurora made a written request in September to remove “defamatory statements” from their Web sites. The groups – Cornucopia Institute, Organic Consumers Association and the Center for Food Safety – have never vacillated in impassioned critique of Aurora’s allegiance to organic principles.

Aurora’s communication said legal action could result if they failed to comply.

A letter, also countering the organizations’ complaints, written by Aurora Chief Executive Marc Peperzak and President Mark Retzloff, ran as a full-page ad in the Sept. 24 issue of Supermarket News.

Mark Kastel, senior policy analyst at Cornucopia, one of the most vociferous critics of Aurora’s farming practices, was unfazed by the dairy’s rejoinder.

“It’s an indication of the magnitude of the damage control undertaken by the company. They are not getting good ink, so they are buying their own,” Kastel said.

His organization is considering counter actions – supporting a class-action suit on the behalf of consumers who bought Aurora milk “fraudulently” labeled organic, as well as researching a lawsuit challenging the USDA’s handling of the matter.

Cornucopia stands by its Web site content in which it calls Aurora’s milk not organic since it was produced in a facility that, according to the USDA’s investigation, violated organic regulations.

Clark Driftmier, senior vice president of marketing for Aurora, calls this inaccurate and defamatory. He categorizes the violations enumerated in the USDA’s Letter of Revocation as allegations, and that the consent agreement superseded the original document. “Our certification is valid and always was. If we have valid certification, our milk is organic. What they say is 100 percent false.”

Joan Shaffer, a USDA spokeswoman, referenced the agency Web site for further explanation of the consent agreement. (Go to www.usda.gov and search for Aurora Dairy.)

This skirmish is the latest in an ongoing war of words between the dairy and Cornucopia that began in January 2005 when the group filed its first formal complaint with the USDA, the governing body of the National Organics Program, alleging that Aurora was operating in violation of organic regulations.

The allegations concerned “access to pasture,” which is mandated in organic regulations, but is written in a language that many in the industry – Aurora included – consider vague and in need of clarity. Since 2005, the USDA has said more stringent guidelines are in the works. However, the release of revised regulations has been repeatedly postponed from 2005 to this year’s end.

The real point of conflict is scale – whether an industrial-style operation like Aurora is truly in keeping with, not the law, but the spirit of the organic food movement. Also at issue is whether Aurora’s domination of the market drives down prices and puts small organic dairy farms at a competitive disadvantage.

Aurora, which supplies private label organic milk to such retailers as Wal-Mart and Costco, is a big-business dairy. It has so-called industrial-size factory farms housing thousands of cows on what critics call feedlot-esque facilities. The average small-, family-scale farm has 100 cows.

There are approximately 120,000 organic milk cows in the U.S., according to Will Fantle, co-director of Cornucopia. Aurora owns approximately 12,000 to 14,000 of them.

Organic milk is currently in surplus due in part to large-scale production facilities, which further challenges the livelihood of smaller dairies.

By 2010 organic dairy is expected to be a $3.5 billion business, according to J.P. Morgan. Organic milk sales will account for up to $1.8 billion. Aurora, a privately held company, has annual revenues of more than $100 million, according to CNNMoney.com.

The changes promised by Aurora in the consent agreement, according to Driftmier, had been in the works for two years: adding 75 acres for a total of 400 at its Platteville facility, decreasing the herd size from more than 4,000 to1,050 cows, allowing a grazing density of no more than four cows per acre and daily access to pasture for cows during the growing season – May to September.

The one-year probation entitles inspectors to drop by unannounced at the Platteville dairy. If the dairy is ever found to be noncompliant, the USDA would proceed with the proposed revocation.

“It’s not really a probation. People just like to call it that. Because both of us (USDA and Aurora) are under a microscope, they decided they need to come out to our facility for a year … to work together to make sure to cross the T’s and dot the I’s,” Retzloff said.

Retzloff, who co-founded Alfalfa’s Market and Horizon Organic Dairy, takes umbrage that in the midst of all this brouhaha, his dedication to organic is impugned. “I’ve worked in this arena for more than 30 years. I helped get the regulations passed. Organic resonates with me, what my whole life is about, what I eat, how I garden, what I advocate to friends, family and business associates.”

Because of the scale of his corporation it’s able to spread the reach of organic – converting conventional farms to organic, promoting animal welfare, integrating sustainable and renewable energy, and furthering stewardship of the land. That’s possible, he said, “because of our size and scale.”

To refute how his operation has been characterized by detractors, Retzloff is “always inviting visitors to Aurora.” The second week of October he planned to host Barbara Robinson, deputy administrator at the USDA, at a tour of the Platteville facility. Robinson signed the consent agreement, along with Peperzak. “A picture is worth a thousand words,” he said.

According to Retzloff, the activists’ beef is scale, and, “We epitomize the size and scale they are against.” But the issue he said is not now how large you are, but how you made it large, and that’s a conversation yet to happen. (A segment of the Food Chain, a radio talk show, planned a dialog between Cornucopia and Aurora Oct. 6, but Aurora declined to participate.)

“We all fall under the same regulations for what organic is, and it should not matter if it’s a small, medium or large farm,” Retzloff said.

But whether that includes equal application of the law is still up for debate. “We’ve always been told that the organic regulations are scale neutral,” said Jim Riddle, also a veteran of the organics industry. “Clearly enforcement is not.”

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