Selective Enforcement by USDA Alleged — Kid Glove Treatment for Dean Foods/WhiteWave
In an open letter published today and addressed to USDA National Organic Program chief Miles McEvoy, The Cornucopia Institute accused the regulatory agency of abdicating its enforcement responsibilities. Cornucopia, an organic industry watchdog, charged that the USDA had allowed Dean Foods and its WhiteWave subsidiary to, allegedly, operate a giant factory farm dairy that has been illegally disadvantaging the nation’s family-scale dairy producers.
The Cornucopia Institute also filed, on February 11, its third formal legal complaint alleging Dean/WhiteWave’s giant industrial dairy, located in Paul, Idaho has continued to operate illegally.
“We’re hoping that third time’s a charm,” said Cornucopia’s Senior Farm Policy Analyst, Mark Kastel.
Prior complaints by The Cornucopia Institute have resulted in the decertification and/or downsizing of a number of other certified organic Concentrated Animal Feeding Operations (CAFOs) in the organic dairy sector, milking up to 10,000 cows each. Cornucopia has suggested that Dean Foods, with its heavy investment in federal election financing and strong lobbying presence in Washington, has “indemnified” the agribusiness giant from judicious enforcement.
“Just as we have banks that have become ‘too big to fail,’ in organics we see Dean Foods and WhiteWave (recently spun-off in 2013 through an IPO on Wall Street), one of the largest industry participants and the kingpin in the powerful Organic Trade Association, repeatedly and successfully flashing their ‘get out of jail free card’ purchased by influence peddlers in Washington,” Kastel explained.
Originally managing over 8,000 head of cattle and thousands of acres of land in an arid region of Southern Idaho, Dean/WhiteWave’s dairy — providing milk for the Horizon Organic label — was accused by Cornucopia, starting in 2005, of confining cattle in pens and buildings instead of providing access to pasture and grazing as federal organic law requires.
Cornucopia claims that their use of these allegedly illegal techniques resulted in millions of dollars of “ill-gotten gains” by catapulting the Horizon label into not only the largest brand in the organic dairy sector, but the largest brand, by dollar volume, in the entire organic industry.
Although the dairy in recent years reduced the number of cows it was managing, and added, for the first time, some amount of pasture, it also increased the number of times the cows were being milked from twice a day to three and even four times a day.
“Properly managing an organic dairy farm by moving the herd to fresh pasture after each twice-per-day milking becomes more and more difficult as herd size gets larger,” said Kevin Engelbert, a certified organic dairy farmer from Nichols, New York. “If a farm gets to the point of milking thousands of cows, 24 hours a day, the logistics of getting the herd from the milking facility to fresh grass, legitimately grazing – as required by law – becomes impossible.”
Recent interviews with dairy staff by Cornucopia investigators suggest that, to promote extremely high levels of milk production, the Horizon farm management prevented the cows from being put out on pasture between some of the milkings, and when they were out, made sure their bellies were already full of high-production rations (TMR feed) eaten in the barn.
Meanwhile, a select group of “fresh, high producing cows,” being milked four times a day, were being entirely confined until their production levels dropped.
The reported level of milk production from the herd supplying Horizon Organics is seen on conventional CAFO dairies, but is very uncharacteristic of legitimate family-scale organic dairies.
“The cows were either prevented from going out and grazing, or if they did go out on pasture they probably didn’t eat much fresh grass but instead lay down and chewed their cud, digesting the ration already eaten in the barn,” Kastel surmised.
The federal regulations explicitly require all livestock to have access to the outdoors and, specifically, ruminants (including dairy and beef cattle, sheep and goats) to have access to high quality pasture.
Cornucopia’s Kastel explained: “There are regulatory provisions allowing a farmer to ‘temporarily’ confine animals if letting them out on pasture would jeopardize their health or cause environmental problems. But nowhere in the standards do they allow confinement because moving thousands of cows back and forth to fresh grass would cut into milk production.”
This past December, after WhiteWave announced to its shareholders a $7.4 million write-down of the asset, it sold its corporate-owned industrial dairy to private investors in Idaho, although its Horizon brand continues to purchase its milk output.
“There is no statute of limitations in terms of enforcing federal organic standards,” said Kastel. “We are asking the USDA to reopen our original complaints and fully investigate our new allegations that the cows on this dairy produced unreasonable amounts of milk based on skirting the requirement that they be fully grazed.”
In 2008 the dairy publication The Milkweed published test results comparing brands of organic milk for nutritional compounds that make the milk healthier and are indicative of the amount of grazing time cattle are provided. The top-rated brand was Cedar Summit, distributing milk in Wisconsin and Minnesota. The lowest was Aurora Organic Dairy, an organization based in Colorado depending exclusively on factory farms and supplying private-label organic milk to Walmart, Costco, Target and other chains. One notch up from the bottom was the Horizon brand.
“WhiteWave continues to purchase milk from giant factory dairies in addition to many family farmers. WhiteWave’s family farm suppliers are, we believe, just as ethical as the farmers supplying other brands,” Kastel affirmed. “But the Horizon brand depends on giant CAFOs, milking thousands of cows each, for a large percentage of their production and that impacts the quality and nutritional value of all their products.”
“Small organic dairies nationwide have struggled with drought, flooding and oppressive heat. Still, we have pastured our cattle as required by the National Organic Program (NOP),” said Jim Goodman, who milks 45 cows near Wonewoc, Wisconsin. “We have provided a product that consumers expect when they buy organic and we make it work economically – without cutting corners.”
“If factory farm organic dairies are unwilling or unable to meet the NOP’s pasture provisions,” Goodman said, “then perhaps it is time they are notified that their continued noncompliance to the National Organic Standards has gone on too long and they should seek a non-organic market for their milk.”
Added Kevin Engelbert, a former USDA National Organic Standards Board (NOSB) member: “When I was on the Board, I was continually being reminded that the recommendations we made must be scale neutral. I think it’s high time that enforcement of the National Rule be scale neutral as well.”
According to a February 2014 article in the authoritative dairy publication, Hoard’s Dairyman, organic dairies are feeling a squeeze with the pay price holding constant for the past three years while enduring exceedingly high feed costs. Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, told the publication that the two main buyers and processors of organic milk “show no inclination to raise prices” paid to farmers to help them cover their increased production costs.
NOTE: WhiteWave reported increased sales in its February 13 corporate earnings call and projected annualized income, after their recent acquisition of the organic produce giant Earthbound Farms, of approximately $2.5 million. Wall Street reacted positively pushing its share value up by approximately 8%.
Given his reported stock holding in the company (1,684,358 shares), CEO Gregg Engles pocketed almost $4 million in increased equity on the 13th (his total WhiteWave stock value is worth $44.5 million). Not a bad day’s wages. This at a time when many of the dairy farmers shipping to WhiteWave/Horizon are struggling to make ends meet (especially in California where they are facing severe drought conditions and paying exorbitant prices for feed).
In addition to products aimed at health-conscious consumers, WhiteWave also manufactures or distributes Land O Lakes extended shelf life products, dairy products, International Delight nondairy coffee creamer and is just introducing a line of creamers under the Dunkin’ Donuts label.