Ever wonder how Target Corp. could sell its organic milk for dollars less than other stores? Turns out the milk might not have been truly organic after all.
Last month, the U.S. Department of Agriculture (USDA) said it had threatened to revoke the organic status of Aurora Organic Dairy, a Colorado farm that supplies Target and Wal-Mart, among others, with its organic milk.
The government found that from late 2003 until this spring Aurora, under retailer labels such as Target's Archer Farms, essentially sold conventional milk slapped with an organic label.
Both Aurora and Target defend the product as organic, noting the company was allowed to keep its organic certification.
At its heart, the government slap is about how to care for an organic cow. But it's also a display of how the ever more mainstream appeal of the $16.7 billion organics market has pressured farms to adopt large-scale efficiencies common in conventional operations. But often those efficiencies -- such as herd sizes that number in the thousands and the use of troughs to feed animals rather than grazing -- clash with the tenets of the organic movement.
Disputes are not unusual in the organics industry, created by Congress in 1990 through the Organic Foods Production Act, as the nascent movement struggles to define itself.
An earlier lawsuit forced the USDA last year to change the way conventional cows are converted to organic. And a large California dairy that had 10,000 cows, about a third of them deemed organic, saw its certification suspended earlier this year by certifier, Quality Assurance International, for skirting the organic rules. That dairy, Vander Eyk, has since vowed to reapply for certification.
That case, and the Aurora one, were brought to the attention of regulators by the Cornucopia Institute, a fledgling group based in northern Wisconsin that since 2004 has charged itself with protecting the integrity of the nation's organic food supply.
Cornucopia filed two complaints against Aurora in 2005, peppering them with photos of the size of Aurora's herd and showing the cows living on barren fields. Since Cornucopia has waged a public-relations battle to force Aurora to downsize its operations. Cornucopia executive director Mark Kastel contends that a 5,000-head dairy farm cannot adequately pasture its cows, that it's just not possible to move that many animals back and forth from pasture to milking barn twice or three times a day.
Aurora recently fought back, threatening to sue the watchdog group, according to Kastel, who provided a copy of a letter from Aurora.
The Aurora case reached a crescendo last month when the USDA revealed that it had threatened to revoke Aurora's organic status for failing to provide enough pasture for its cows and selling conventional milk as organic, among other things. In a letter sent April 16 and made public last month, the Agricultural Marketing Service, a USDA agency, wrote that it found 14 "willful violations" of organic rules, from inadequate pasture to nonorganic bedding to sending organic cows to conventional farms for a period before retrieving them for milking.
The farm avoided a total revocation of its certification by signing a consent agreement last month that put its operations on probation for one year, with the possibility of losing organic accreditation for five years as punishment for further violations.
The farm agreed to make changes, adding 75 acres of pasture, for a total of 400 acres, at its Platteville, Colo., farm, and to shrink herd size from 4,200 cows to 1,070, according to a company spokesman. Aurora will also allow the organic certification of one of its facilities in Greeley, Colo., to expire.
Aurora is billing the agreement as a dismissal of the USDA case, a sentiment Target echoed this week in response to questions.
Target is confident
"Target is confident that our Archer Farms Organic Milk is organic," said spokeswoman Brie Heath.
Cornucopia wants retailers to better police their organic food supply, and publishes a "milk scorecard" on its website that grades each brand according to its adherence to organic principles. Milk from Aurora gets the lowest rating.
"There's no excuse for Target at this juncture" to continue purchasing milk from Aurora, Kastel said.
Heath disagreed, noting no change is planned with its milk supplier. She said the company plans to expand its organic offerings, in large part because customers have asked for it.
A 2007 survey coming out next week from the Organic Trade Association says organic dairy sales, which include eggs, were 4.07 percent of total dollar sales at grocery stores last year, double that of sales in 2002. All organics, meanwhile, were 2.8 percent of grocer's sales.
The rise in demand has brought a counter-intuitive drop in sale price this year, in part because so many organic farms have come online in the last year, creating a glut of organic milk where there was once a shortage. The industry now pays farmers about $25.50 to $30 per hundred pounds of raw milk, or hundredweight, for organic milk, and $21 to $22 per hundredweight for conventional, said Edward Maltby, a milk pricing expert based in Massachusetts. A year ago conventional milk was closer to $14 per hundredweight.
The rapid rise in number of organic dairy farms -- some people estimate as many as 1,500 in the country today -- has outpaced the ability of the USDA's Agricultural Marketing Service to regulate it, argued Theresa Marquez, chief marketing executive for Organic Valley, a farmer's co-op based in Viroqua, Wis.
"They are really stretched out and don't have enough funding," she said.
That's a real problem, said Barth Anderson, the Research and Education Coordinator at the Wedge Food Co-op. "The organic system needs to have a system of checks and balances to see what the certifiers are doing, because the certifiers have a tremendous amount of power."
And if larger farms skirt the rules it could dilute the industry's marketability, Kastel. "They are squandering the goodwill that real farmers and real organic business people have built over the decades."
Matt McKinney 612-673-7329
Matt McKinney firstname.lastname@example.org