The Organic Valley farmers coop has been a huge success. With national sales hitting almost $1 billion, this upstart challenger of conventional agriculture has helped create a massive consumer market for chemical-free farming. Small family farmers in Wisconsin and across the nation have gone organic because of the premium prices their milk, eggs and meat attracts in the organic marketplace. But in researching this story for The Progressive magazine I found the coop in a surprisingly precarious position. I write:
Surging consumer demand for organics has created supply shortages for dairy products, and immense opportunities for profit. That has attracted some of the nation’s largest American food corporations to step up an already sizable investment in organics. These aren’t people motivated by protecting the environment, says David Kaseno of the National Farmers Organization. They are “people who think: ‘Hey we can make a lot of money in organic milk.’”
The $46 billion merger of Kraft Foods Group and the H.J. Heinz Co. in March will prompt its rivals to bulk up by buying fast-growing organic food labels, both The New York Times and Bloomberg News predicted. The food giants already produce a stunning 70 percent of the items stocked in a typical co-op grocery, says Philip Howard,a Michigan State University professor who tracks corporate consolidation in the organic world.
For organic industry observers, this poses stark questions for Organic Valley: Is it smart enough and big enough to compete with the corporate giants? Will it yield to the temptation to compromise organic standards to maintain market share? More to the point, will it hold on to its all-important dairy members, who have been abandoning the co-op for the significantly better pay offered by some Organic Valley competitors?
This is the paradox of Organic Valley: At a moment of great success, it faces something of an existential threat.
To read more, please go here.
I interviewed a ton of people for the story, including Organic Valley CEO George Siemon. Some of this views can be found in the story. I wrote an online sidebar that touches on other matters. I suspect that some people will be surprised at his positive impressions of Walmart. You can read about it here.