7200-Cow Dairy No Longer Part of Cooperative’s Plan

The Cornucopia Institute

La Farge, WI — After weeks of controversy in the dairy community, Organic Valley’s Board of Directors has reaffirmed the decision to end its controversial milk purchasing arrangement with a 7200-head, industrial-scale dairy in Texas.

The producer-owned co-op, renowned for helping build the booming organic dairy market with its reliance on family farms, has had its business practices placed under the microscope in recent weeks. The issue came to a head when an organic industry watchdog, The Cornucopia Institute, revealed that the cooperative had been quietly buying milk from a massive factory farm, the Natural Prairie Dairy near Dalhart, TX.

Conflicting signals emerged from Organic Valley after the year-long relationship became public. Management at the co-op, referring to the purchases as “temporary,” said that they would continue buying milk from the massive Texas dairy while the co-op worked to grow its farmer base in the Texas market.

“Frankly, after this controversy became public, we were surprised by management’s statements indicating that they were going to continue buying milk from the Texas factory farm,” said Mark Kastel, Senior Farm Policy Analyst for Cornucopia. “But the cooperative is a democracy, and its farmer-owners have made it clear that they are ending the purchases and are taking a different path toward building a Texas market for Organic Valley products.”

“I am so pleased that our Board of Directors and management heard the concerns of rank-and-file co-op members and reversed the decision to purchase this questionable milk,” said Darlene Coehoorn, president of the Midwest Organic Dairy Producers Alliance and long-time Organic Valley member. “Nothing is more important than maintaining the trust we have earned from so many dedicated organic consumers around the country.”

When Cornucopia first learned that Organic Valley was buying milk from the Texas factory farm, they initiated a dialogue with its management seeking to convince them that their popular “family farm” and “farmer-owned” cooperative brand, advertised widely to consumers, was at risk due to their association with milk from Natural Prairie, the largest industrial-scale “organic” dairy in the nation, covering 9000 acres and managing upward of 10,000 total head of cattle (milk cows plus young stock).

Farmers, and their member-leadership at the cooperative, had no idea milk was being purchased from so massive an agribusiness, widely considered inconsistent with the spirit of the organic movement. “This incident should serve as a learning opportunity,” added Coehoorn, who serves on Organic Valley’s elected Dairy Executive Committee. “We must work closer with management on policies of this nature in the future.”

Cornucopia has been intensely critical of other dairy processors and marketers who rely on factory farms for producing organic milk. The organic watchdog has filed a series of formal legal complaints with the USDA spotlighting alleged violations of federal organic law at a number of factory farms. The complaints, several of which led to USDA enforcement actions and sanctions, have involved companies such as Dean Foods, the $12 billion dairy giant and owner of the Horizon Organic label, and the Aurora Organic Dairy, whose factory farms produce private-label store-brand milk for Wal-Mart, Target, Safeway, Costco, and other chains.

“We have held Organic Valley in high regard,” noted Kastel. “But once we discovered that Organic Valley was cutting some of the same corners as Dean Foods, we had the ethical responsibility to treat both organizations the same way,” Kastel added. After negotiations with Organic Valley’s management broke down, the organization brought the situation to the attention of key farmer-owners with management oversight.

“The difference between Dean Foods and Organic Valley is that Organic Valley is actually controlled by the farmers themselves, rather than by wealthy investors,” explained Kastel. “The farmers were able to turn this thing around. We are once again very pleased to be able to endorse the practices of Organic Valley.”

Tony Azevedo, of Stevinson California, another long-time Organic Valley member, and president of the Western Organic Dairy Producers Alliance, said: “This incident should be very reassuring to our many loyal Organic Valley customers. Unlike most business we are not strictly governed by the bottom line.”

Cornucopia has produced a report and scorecard that rate the nation’s organic dairy products based on the ethics and integrity of organic production practices. The scorecard can be viewed at www.cornucopia.org.

On July 14, 2008 The Cornucopia Institute was informed by a Board of Director’s representative of the CROPP Cooperative (Organic Valley) that they were no longer buying milk from Natural Prairie dairy near Dalhart, Texas. This was confirmed on July 15, 2008 by Organic Valley CEO George Siemon. Siemon clarified the situation by stating although they were bringing in their own milk, it was being processed at the same manufacturing plant where Natural Prairie’s milk is processed for their other customers (primarily private-label grocery chains). On an interim basis, Organic Valley’s milk will be co-mingled in storage with Natural Prairie’s. The cooperative has taken steps to immediately segregate their own milk, which might be accomplished in as little as two weeks.

The average size Organic Valley member-farm milks approximately 65-70 cows.

“At family-scale organic farms the cows generally have names not numbers,” adds Kastel. “The cows are treated with care and live long healthy and happy lives. This stands in stark contrast to industrial-scale dairies where the cows are treated as production assets and disposable if they prematurely become ill or their milk production falls off.”

Organic Valley officials have referred to this mammoth operation as, “a family farm albeit a large one” with a “model pasture system.” An extensive interview with the contractor who built and designed the facilities, and review of satellite imagery, indicated that unlike legitimate organic farms, that commonly have one cow per acre, stocking levels at Natural Prairie were as high as 7.2 cows per acre. Further adding to the serious questions about the legitimacy of grazing at the giant operation was the fact that they actually mow and harvest hay from the same fields grazed by their herd, increasing the already bloated, effective, stocking rates to a stratospheric level.

Although the USDA does not set a maximum number of cows per acre, Organic Valley’s own standards have a ceiling of three cows per acre. In Europe, converting from hectares, governmental regulations set a maximum stocking rate at less than one cow per acre.

Organic Valley management justified purchasing milk from Natural Prairie, a non-member of the cooperative and whose size far exceeds that of any of its other dairy suppliers, by saying that it was a temporary measure in order to help 3-5 Texas family farmers who did not have enough milk on their own to be economically processed. Management has represented the purchases as 1% of all Organic Valley’s milk purchases.

Management also told the co-op’s farmer-leadership that the organization had made significant investments to establish their brand in Texas and would incur great losses if they had to pull out (their presence in Texas was jeopardized when a few of their original farmers went out of business due to extreme drought and the high cost of replacement feed).

“There has never been any question that the motivation on the part of management to help their Texas farmers was legitimate,” Kastel said. “The operative question was whether buying from the country’s largest organic factory dairy undermined the reputation of the Organic Valley label and thus put the balance of their almost 1000 dairy family’s livelihoods at risk.”

“The current shift away from Natural Prairie clearly proves that other alternatives could have been used in the laudable effort to support family farmers in Texas short of compromising Organic Valley’s high standards for milk,” added Kastel.

Organic Valley has established internal organic standards that are higher than the USDA’s federal regulations. For example, they require their farmer-members to meet strict benchmarks assuring that their dairy cows are afforded pasture and obtain a significant amount of their feed ration from grazing. They also require their farmers to raise their baby calves from birth rather than bringing in conventional cattle as herd replacements.

“We know, from speaking to many of our members who ship milk to Organic Valley, that the co-op is doing an admirable job in enforcing their standards by inspecting each and every one of their farms,” said Cornucopia’s Kastel. “The Natural Prairie deal was a bad aberration. All the supporters of Organic Valley, and there are many, should be very pleased that this incident has had a positive resolution.”

    The Cornucopia Institute is a farmer-led agricultural policy research group that is dedicated to promoting economic-justice for family farmers. Its members ship milk to national and regional organic dairy marketers including HP Hood, DFA, Stonyfield, Clover Stornetta, Natural by Nature, Westby Cooperative Creamery, Cedar Grove Cheese, Humboldt Operative Creamery, Organic Choice, Farmers All-Natural Creamery, LOFCO, Scenic Central, Lifeway/Helios, Ben & Jerry’s, and of course the two largest national processors, Organic Valley and Dean/Horizon. In addition the majority of the nation’s widely respected farmstead organic dairy producers support Cornucopia’s mission as members.

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