18 July 2008

3 minute read

North America

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.”

TheCattleSite News Desk