Dairy, Dairy, Quite Contrary

As a writer, one of my goals is to demystify farming for non-farmers -- to remind people that their food comes from somewhere, grown by someone, often drawing down finite resources. Less than 2 percent of Americans farm, yet all of us eat. Whether you're scarfing a Whopper or savoring a farmers' market peach, food has a history tied to people and the earth; and that history matters for both.

The organic label, for all its success, sometimes complicates my job. Rather than challenge consumers to learn more about their food, the label too often lulls them into feel-good ignorance. For many consumers, "organic" means food that's healthy, clean, and fair to farmers and farmworkers.

Of course, the reality is much more complicated. An organic label on a bag of supermarket spinach tells us something -- for example, that synthetic pesticides and fertilizers weren't used in its production. But the label doesn't paint a complete picture of the conditions under which the spinach was grown.

In her 2004 book Agrarian Dreams, Julie Guthman demonstrates that organic agriculture in California often relies on imported inputs and exploited labor. Likewise, when organic salad greens stuffed in little plastic bags move cross-country in refrigerated trucks, they count as "green" only in color, as Michael Pollan shows in Omnivore's Dilemma.

I've been thinking about the organic label -- what it reveals and what it hides -- as I follow what's going on in the organic-dairy market. Consumer food prices are rising across the board, but have reached particularly elevated levels for organic dairy; meanwhile, the price dairy farmers get for their milk changed little, while their cost of doing business has jumped. We touched on this topic back in April on Gristmill, when we featured a debate between an organic dairy-farmer representative and a dairy-processing executive (I weighed in here). The conditions we discussed have only intensified since then.

Milking It

At supermarkets near the western North Carolina vegetable farm where I work, milk from the national, farmer-owned Organic Valley brand goes for $6.49 per gallon -- a nearly $3.00 premium over non-organic store-brand milk ($3.59).

But if you think things are getting pricey in the organic dairy aisle, imagine trying your lot as an organic dairy farmer. Over the past year, farmers have been hit with a dramatic jump in their input costs -- everything from organic feed to diesel fuel to family health care. At the same time, the price they actually get for their milk has been relatively flat.

According to the Northeast Organic Dairy Producers Alliance, the price of two primary feedstocks, organic corn and soy, has jumped by 59 percent and 77 percent, respectively, in the last year. The price of diesel fuel -- essential for running tractors -- has spiked by 60 percent. But farmers selling their milk to processors saw their rate nudge up only 12 percent.

Now, some may wonder why true organic dairy farmers would be affected by feed prices at all. Given that cows evolved to eat grass, not corn or other grains, shouldn't organically managed cows feed only on pasture? Ideally, the answer is yes. But in harsh northern climates like those of New England and the Midwest, grass only thrives for part of the year. When winter hits and pastures lie under snow, farmers face two choices: feed their cows strictly hay, which lacks the nutrient density to keep production at a high clip; or supplement with some corn and soy.

The all-hay option means a seasonal collapse in income; the corn-and-soy alternative, in the current market environment, means a seasonal surge in production costs. For small family farms, either can spell disaster.

Up in the Northeast, organic dairy producers are struggling just to survive. "Many producers are losing money on each gallon," Ed Maltby, executive director of the Northeast Organic Dairy Producers Association, told me in a phone interview. "Some are switching to conventional, and a few are exiting the business altogether." According to Maltby, some farmers -- including ones who belong to the Organic Valley cooperative -- are losing as much as 60 cents on every gallon they sell.

In this case, the organic label hardly translates into fairness to farmers.

Quarting Disaster

For Maltby, the answer is simple: organic processors need to raise the price they pay farmers. "Essentially, we're expecting farmers to go without health care for their families and accept lower living standards," he says. "Why shouldn't the processors take some of the pain during this bad time?"

One constraint is fierce competition at the retail level. As organic milk has gained popularity [PDF] -- largely due to the consumer backlash against growth hormones -- large corporations concerned more about their margins than the integrity of organic have barreled into the market.

Dean Foods, the dominant U.S. conventional milk processor, snapped up Horizon, by far the nation's largest organic-milk brand, in 2004. According to one source, Horizon alone now accounts for 60 percent of the organic milk market.

To protect their own profit margins, such mega-players buy "organic" milk from the cheapest sources possible -- including factory-style farms that confine thousands of dairy cows into pens year-round, giving them no meaningful "access to pasture," as they are required to do under USDA organic code. These operations amount to confined-animal feeding operations (CAFOs), diabolic combinations of animal cruelty and environmental devastation.

The Wisconsin-based watchdog Cornucopia Institute has established that Horizon sources as much as half of its milk from such operations -- and the USDA has generally looked the other way. Another mega-organic dairy processor, Aurora, is up to similar things, Cornucopia reports. Started by two former Horizon executives, Aurora supplies milk to supermarket house brands across the land.

By allowing corporate processors to flout organic rules, the USDA essentially pits family-scale farms with fragile finances against deep-pocketed corporate giants. When a crisis like the current one hits, the giants consolidate their power, making it even tougher for small-scale farmers to compete.

Of course, you're not going to read about failing farms, corporate power, or the USDA's limp oversight on a milk bottle -- not even an organic one. And that means more work for the likes of me. Come to think of it, rather than complicate my job, the organic label may be helping to keep me gainfully employed.