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A Milk War Over More Than Price
A Milk War Over More Than Price
Author: Melanie Warner, The New York Times
Many organic foods have been popping up on the shelves of Wal-Mart in recent years, but none
have been as popular as organic milk. For many shoppers, particularly mothers with small
children, it is the first organic product they try.
Now organic milk is about to become much more widely available, as Wal-Mart rolls out its own
organic brand, which will be cheaper than similar milk on the market. But critics worry that what
consumers will be getting is a diluted form of organic milk.
Sold under Wal-Mart’s popular Great Value label, half-gallon cartons of the milk have been
quietly introduced at 1,200 supercenters and Neighborhood Markets, according to a Wal-Mart
spokeswoman, Karen Burk.
Wal-Mart’s own organic milk is likely to create stiff competition for many other makers of organic
milk — which comes from cows that have not been treated with hormones or antibiotics — and
even sellers of conventional milk.
Harvey Hartman, president of the Hartman Group, a market research firm working with Wal-Mart
on its organic initiatives, said Wal-Mart’s own brand of organic milk will mean a lot more will be
sold in the United States. “They’re creating incremental users because they’re removing one of
the big inhibitors to buying organic, which is price,” he said.
Last year, organic milk sales increased by 25 percent from the year before and Mr. Hartman
predicts that Wal-Mart’s brand could lift annual growth to as much as 35 percent. Currently,
organic dairy represents 3.5 percent of all dairy products sold in the United States, according to
the Organic Trade Association.
The organic milk Wal-Mart is selling under its own label comes from Aurora Organic Dairy, which
also supplies Safeway, Costco, Target and Wild Oats with their store brands of organic milk. But
Wal-Mart’s entry into the market stirs greater attention from critics.
Activist groups, as well as some organic food retailers and dairies, contend that the company
where Wal-Mart and the other big retailers get their milk operates large factory farms that are
diluting the principles of organic agriculture and delivering customers a substandard product.
They argue that Aurora’s cows do not spend any significant time roaming pastures and eating
fresh grass; instead they live on a diet high in grains.
“They are trying to cut corners in the interest of producing milk as cheaply as possible,” said
Mark Kastel, senior farm analyst at the Cornucopia Institute, which represents organic family
farmers.
Wal-Mart and its supplier say that those allegations are misleading and that Aurora’s two farms in
Colorado and Texas are in full compliance with Agriculture Department standards for organic
dairy.
Executives at Aurora, which is based in Boulder, Colo., acknowledge that their farms, with 4,000
cows in Platteville, Colo., and 3,300 in Dublin, Tex., are among the largest organic dairy
operations in the country. But they say their animals are healthy and contented and that the
company’s organic milk is of the highest quality.
Wal-Mart’s buying power is certainly cutting the cost of its organic milk. An informal survey of
organic milk at Denver area grocery stores found that Wal-Mart’s label was 8 percent to 35
percent cheaper than other brands. At Wal-Mart, it was selling for an average of 10 percent less
than Horizon Organic milk, the brand Wal-Mart has been carrying for three years.
The controversy turns on how closely Aurora adheres to the principles behind the organic food
movement. Many organic farmers say grass feeding is essential for organic dairy production
because it is part of a cow’s natural behavior. Milk from grass-fed cows, they say, is also higher
in beneficial fatty acids than milk from cows fed grain, making it more nutritious.
At Aurora’s Platteville operation, about 40 miles north of downtown Denver, 4,000 cows are put
on grass only when not being milked or when they are nearing the end of a lactation cycle. That
totals about two to three months a year. The rest of the time they stay in dirt-lined outdoor pens
where they eat from an ample trough filled with a mixture of hay, silage, corn and soybeans.
Clark F. Driftmier, head of marketing at Aurora, said the company planned to reduce the number
of cows in Platteville to 1,000 by next summer so all the animals could graze. In addition, he said,
the number of acres of pasture at the Texas farm will triple by next spring.
The company, he added, is opening a 3,200-cow dairy farm in Kersey, Colo., that has been
designed to allow for year-round daily access to pasture. Mr. Driftmier acknowledges these
changes are being made partly in anticipation of the Agriculture Department’s plans to tighten
rules requiring more grazing for milk to be called organic.
Mr. Kastel of Cornucopia calls Aurora’s efforts “greenwashing.” He says the farm’s acreage per
cow will still be low and that the company is overtaxing its animals by milking them three times a
day instead of twice, which is the norm at organic farms.
John Mackay, chief executive of Whole Foods Market, the nation’s largest organic food
supermarket chain, toured Aurora’s Platteville farm in May with Margaret Wittenberg, vice
president for quality standards. They found it to be “unacceptable” and “not up to our
standards,” said a spokeswoman, Ashley Hawkins.
While a 4,000-cow farm is not large among conventional dairies, which can hold as many as
25,000 cows, it dwarfs most organic farms. Jim Riddle, organic outreach coordinator for the
University of Minnesota and former chairman of the National Organic Standards Board, said that
putting thousands of cows on pasture is almost impossible.
Wal-Mart would not say how much it was paying Aurora for its milk and whether that price was
lower than the typical $26 per hundred pounds of milk that most organic dairy farmers get. But on
its Web site, Aurora boasts that it is one of the lowest-cost producers of organic milk in the
country, in part because the Platteville farm has a milking plant on site.
Because Aurora milks its cows three times a day and feeds its animals diets of calorie-dense
grains, its milk production per cow is also higher than that of other organic milk producers. In
Platteville, Aurora’s annual milk output per cow is 20,000 pounds, according to the company,
whereas most organic dairies get 14,000 to 18,000 pounds per cow, Mr. Kastel says.
Mr. Driftmier at Aurora says that grass feeding should not be the only measure of animal health
and well-being. “Our record of animal welfare is certified by an independent third-party expert,”
he said. “Our animals are outside all year long; they’re never locked into barns.”
In accordance with organic standards, Aurora cows also get no hormones or antibiotics and all
their feed is grown organically.
Many in the organic industry, however, say that Wal-Mart, in its push to move organics into the
mainstream, could do more than simply search for the biggest and lowest-cost producer in the
market.
Mr. Riddle, the organic coordinator, points to subsidy programs that dairy companies like Organic
Valley, Horizon Organic and Stonyfield Farms are operating to help small and midsize dairy
farmers move to organic methods. “These programs are going to help alleviate the organic milk
shortage by next year,” he said. “But you can’t increase the supply overnight or place orders and
have them immediately filled. Organic takes time.’’
Source: The Cornucopia Institute
Author: Melanie Warner, The New York Times
Many organic foods have been popping up on the shelves of Wal-Mart in recent years, but none
have been as popular as organic milk. For many shoppers, particularly mothers with small
children, it is the first organic product they try.
Now organic milk is about to become much more widely available, as Wal-Mart rolls out its own
organic brand, which will be cheaper than similar milk on the market. But critics worry that what
consumers will be getting is a diluted form of organic milk.
Sold under Wal-Mart’s popular Great Value label, half-gallon cartons of the milk have been
quietly introduced at 1,200 supercenters and Neighborhood Markets, according to a Wal-Mart
spokeswoman, Karen Burk.
Wal-Mart’s own organic milk is likely to create stiff competition for many other makers of organic
milk — which comes from cows that have not been treated with hormones or antibiotics — and
even sellers of conventional milk.
Harvey Hartman, president of the Hartman Group, a market research firm working with Wal-Mart
on its organic initiatives, said Wal-Mart’s own brand of organic milk will mean a lot more will be
sold in the United States. “They’re creating incremental users because they’re removing one of
the big inhibitors to buying organic, which is price,” he said.
Last year, organic milk sales increased by 25 percent from the year before and Mr. Hartman
predicts that Wal-Mart’s brand could lift annual growth to as much as 35 percent. Currently,
organic dairy represents 3.5 percent of all dairy products sold in the United States, according to
the Organic Trade Association.
The organic milk Wal-Mart is selling under its own label comes from Aurora Organic Dairy, which
also supplies Safeway, Costco, Target and Wild Oats with their store brands of organic milk. But
Wal-Mart’s entry into the market stirs greater attention from critics.
Activist groups, as well as some organic food retailers and dairies, contend that the company
where Wal-Mart and the other big retailers get their milk operates large factory farms that are
diluting the principles of organic agriculture and delivering customers a substandard product.
They argue that Aurora’s cows do not spend any significant time roaming pastures and eating
fresh grass; instead they live on a diet high in grains.
“They are trying to cut corners in the interest of producing milk as cheaply as possible,” said
Mark Kastel, senior farm analyst at the Cornucopia Institute, which represents organic family
farmers.
Wal-Mart and its supplier say that those allegations are misleading and that Aurora’s two farms in
Colorado and Texas are in full compliance with Agriculture Department standards for organic
dairy.
Executives at Aurora, which is based in Boulder, Colo., acknowledge that their farms, with 4,000
cows in Platteville, Colo., and 3,300 in Dublin, Tex., are among the largest organic dairy
operations in the country. But they say their animals are healthy and contented and that the
company’s organic milk is of the highest quality.
Wal-Mart’s buying power is certainly cutting the cost of its organic milk. An informal survey of
organic milk at Denver area grocery stores found that Wal-Mart’s label was 8 percent to 35
percent cheaper than other brands. At Wal-Mart, it was selling for an average of 10 percent less
than Horizon Organic milk, the brand Wal-Mart has been carrying for three years.
The controversy turns on how closely Aurora adheres to the principles behind the organic food
movement. Many organic farmers say grass feeding is essential for organic dairy production
because it is part of a cow’s natural behavior. Milk from grass-fed cows, they say, is also higher
in beneficial fatty acids than milk from cows fed grain, making it more nutritious.
At Aurora’s Platteville operation, about 40 miles north of downtown Denver, 4,000 cows are put
on grass only when not being milked or when they are nearing the end of a lactation cycle. That
totals about two to three months a year. The rest of the time they stay in dirt-lined outdoor pens
where they eat from an ample trough filled with a mixture of hay, silage, corn and soybeans.
Clark F. Driftmier, head of marketing at Aurora, said the company planned to reduce the number
of cows in Platteville to 1,000 by next summer so all the animals could graze. In addition, he said,
the number of acres of pasture at the Texas farm will triple by next spring.
The company, he added, is opening a 3,200-cow dairy farm in Kersey, Colo., that has been
designed to allow for year-round daily access to pasture. Mr. Driftmier acknowledges these
changes are being made partly in anticipation of the Agriculture Department’s plans to tighten
rules requiring more grazing for milk to be called organic.
Mr. Kastel of Cornucopia calls Aurora’s efforts “greenwashing.” He says the farm’s acreage per
cow will still be low and that the company is overtaxing its animals by milking them three times a
day instead of twice, which is the norm at organic farms.
John Mackay, chief executive of Whole Foods Market, the nation’s largest organic food
supermarket chain, toured Aurora’s Platteville farm in May with Margaret Wittenberg, vice
president for quality standards. They found it to be “unacceptable” and “not up to our
standards,” said a spokeswoman, Ashley Hawkins.
While a 4,000-cow farm is not large among conventional dairies, which can hold as many as
25,000 cows, it dwarfs most organic farms. Jim Riddle, organic outreach coordinator for the
University of Minnesota and former chairman of the National Organic Standards Board, said that
putting thousands of cows on pasture is almost impossible.
Wal-Mart would not say how much it was paying Aurora for its milk and whether that price was
lower than the typical $26 per hundred pounds of milk that most organic dairy farmers get. But on
its Web site, Aurora boasts that it is one of the lowest-cost producers of organic milk in the
country, in part because the Platteville farm has a milking plant on site.
Because Aurora milks its cows three times a day and feeds its animals diets of calorie-dense
grains, its milk production per cow is also higher than that of other organic milk producers. In
Platteville, Aurora’s annual milk output per cow is 20,000 pounds, according to the company,
whereas most organic dairies get 14,000 to 18,000 pounds per cow, Mr. Kastel says.
Mr. Driftmier at Aurora says that grass feeding should not be the only measure of animal health
and well-being. “Our record of animal welfare is certified by an independent third-party expert,”
he said. “Our animals are outside all year long; they’re never locked into barns.”
In accordance with organic standards, Aurora cows also get no hormones or antibiotics and all
their feed is grown organically.
Many in the organic industry, however, say that Wal-Mart, in its push to move organics into the
mainstream, could do more than simply search for the biggest and lowest-cost producer in the
market.
Mr. Riddle, the organic coordinator, points to subsidy programs that dairy companies like Organic
Valley, Horizon Organic and Stonyfield Farms are operating to help small and midsize dairy
farmers move to organic methods. “These programs are going to help alleviate the organic milk
shortage by next year,” he said. “But you can’t increase the supply overnight or place orders and
have them immediately filled. Organic takes time.’’
Source: The Cornucopia Institute