Domestic Producers Hurt by Growing Corporate Imports

On the heels of the release of The Cornucopia Institute’s study exposing the import-dependent organic soy industry, a report by the United States Department of Agriculture substantiates Cornucopia’s findings. Using different research methods, the two reports reach similar conclusions: organic manufacturers and farmers are facing escalating competition from large conventional food manufacturers entering the organic market, and companies are increasingly looking to China and other countries to import organic foods and ingredients.

“Two of the major findings of the USDA report – conventional food corporations taking over successful independent organic companies, and increasing dependence on imports – are not unrelated,” suggests Charlotte Vallaeys, Farm and Food Policy Analyst at The Cornucopia Institute and primary author of the organization’s study Behind the Bean: The Heroes and Charlatans of the Organic Soy Industry. The USDA report, Emerging Issues in the U.S. Organic Industry, was released earlier this month.

“When agribusiness corporations enter the organic market, like Dean Foods when it bought the Silk soymilk brand from a pioneering independent company, they sometimes look abroad for cheaper imports or abandon organics altogether, rather than maintain their commitment to supporting domestic organic farmers,” Vallaeys adds. “The handlers mentioned in the USDA report that now complain of shortages of domestically grown organic crops are therefore by no means innocent victims of forces beyond their control, but rather helped create these shortages by opting for cheaper organic imports instead of supporting domestic farmers with sustainable prices.”

According to the USDA’s report U.S. organic soybean production started declining several years ago despite steeply increasing demand for organic feed grains and consumer products such as soymilk. “As the number of organic soybean producers has increased worldwide, U.S. producers have faced increased competition for the domestic market,” concludes Catherine Greene, USDA economist and lead author of the USDA report.

Cornucopia contends that the purported shortage of organic soybeans in the United States is not a legitimate excuse for companies to import cheap crops from China or abandon organic ingredient sourcing altogether. “Our research reveals that there are many highly committed organic companies that are offering products made with American-grown soybeans,” says Vallaeys. Examples are Eden Foods, which continues its long-standing relationships with domestic farmers who grow organic soybeans, and new market players like Vermont Soy that are actively engaged in recruiting existing local organic farmers to grow soybeans.

On the opposite end of the spectrum are companies like Dean Foods, a leading agribusiness involved mainly in dairy, which markets Silk soymilk. When Dean Foods first acquired the Silk brand, American farmers were eager to ramp up domestic production of organic soybeans for their soymilk. According to Cornucopia’s report, Dean Foods quickly dashed their hopes, telling multiple midwestern farmers and farmer cooperatives that they had to match the rock-bottom prices of Chinese organic soybeans – a price they simply could not meet. So Dean Foods bought Chinese soybeans for years, building its commanding industry market share, before substantially decreasing its support of organic agriculture altogether. Today, few Silk products are certified organic and some are even processed with toxic chemicals and labeled “natural.”

“What comes first, the organic chicken or the organic egg?” asks Mark Kastel, Senior Farm Policy Analyst at The Cornucopia Institute. “Companies like Dean Foods complain that there aren’t enough organic soybeans grown in the U.S., yet they took an active role in creating this shortage by refusing to work with American farmers when they had the chance.”

Merle Kramer, a marketer for the Midwestern Organic Farmers Cooperative, based in Michigan, laments: “Companies like White Wave had the opportunity to push organic and sustainable agriculture to incredible heights of production by working with North American farmers and traders to get more land in organic production, but what they did was pit cheap foreign soybeans against the U.S. organic farmer, taking away any attraction for conventional farmers to make the move into sustainable agriculture.”

The USDA report concludes, “Despite the potential for organic agriculture to improve the environmental performance of U.S. agriculture, the national standard is having only a modest impact on environmental externalities caused by conventional production methods because the organic adoption rate is so low.” In other words, our country could be reducing pesticide contamination of surface- and groundwater, soil erosion, loss of wildlife, and other negative impacts on the environment, but greed appears to have stunted the growth of domestic organic agriculture.

As a by-product of its research, Cornucopia also creates scorecards that rate organic dairy and soy foods brands based on their production practices and ethical values. Consumers who buy organic, in part because they want their purchases to benefit domestic farmers and the American environment, may not realize that leading brands are importing from countries with dubious food safety and organic integrity, or environmental issues, like China, Brazil, and India.

“The Cornucopia Institute’s goal is to help consumers differentiate between the brands that are truly committed to organic values, from those that aren’t,” says Kastel. “We encourage consumers to use the scorecards when voting in the marketplace, and to support the companies that buy American-grown organic soybeans.”

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