Moove Over Corporate Cows

Wisconsin-based Organic Valley, the country’s largest organic co-op, hopes to revive the family farm

MATT FENDRY’S COWS are a contented lot. Peacefully chewing, their velvet brown coats gleaming and gentle eyes beaming, they appear to have stepped out of the pages of a children’s picture book. They spend their days on Fendry’s organic farm near Lanesboro grazing in small paddocks of fresh meadow grasses, or loafing in the shade.

Fendry is just 24 years old, and if you chat with him about farming, you get the sense that his trade chose him. Though his father worked in town, Fendry’s grandfather used to raise dairy cattle near St. Charles. “As long as I can remember, I wanted to farm,” he says.

Around the age that most kids start baby-sitting or get a job at the mall, Fendry planted a vegetable garden and sold the produce in Rochester. In high school, he joined a farm training and mentoring program. A few months after graduation, he was milking his own herd of Jersey cows and raising young stock on a farm he now shares with his parents and sisters.

Today, small-scale farms like Fendry’s are the exception. Most milk comes from cows that are confined by the tens of thousands in concrete and steel “farms” where they are pumped with hormones to increase their productivity and antibiotics to combat illness. Confinement operations are the norm because they maximize milk production, slash expenses, and keep grocery-store milk prices cheap.

But large-scale farming comes with some hefty costs: it can despoil the environment and compromise both the animals and the milk they produce. So-called corporate farming has quickly been replacing the family farm. From 1978 to 1997, Minnesota lost 21 percent of its family farms—the equivalent of more than two a day, according to the U.S. Department of Agriculture. During the same period, the number of Minnesota farms owned by corporations nearly doubled. And the number of the state’s largest farms, those totaling 2,000 or more acres, more than tripled. Given the powerful forces of consolidation, and the fact that conventional milk prices have virtually flatlined for the past decade, do Fendry and his 30 cows stand a chance of competing?

Fendry thinks so. The key, he says, is organic, meaning that cows have access to pasture and milk is produced without chemical pesticides, drugs, hormones, or genetically modified feeds. Organic farmers who sell directly to consumers, whether at farmers’ markets or through a share-based program, can command a good price from people willing to pay more for a healthy, locally grown product. But direct sales also require that farmers be as skilled at marketing as planting, one reason why Fendry and some 900 others joined Wisconsin-based Organic Valley, the country’s largest organic co-operative. With access to national distribution channels and sophisticated brand and marketing savvy, Fendry can concentrate on farming rather than hauling his milk to grocery stores and trying to carve out a niche for his product. In short, by pooling resources, the co-op can operate at an economic scale to rival the factory farms—while avoiding many of their drawbacks.

Organic Valley, with headquarters in La Farge, Wisconsin, was born out of frustration during the 1980s farm crisis, when Midwest farmers went bankrupt in record numbers. Land prices plummeted. Farmsteads stood emptied and abandoned. Small towns shuttered their main streets. The crisis was so deep and long-lasting that many displaced farmers were retrained—as peer counselors to offer emotional support to other displaced farmers. Corporate farms used the opportunity to expand.

Back then, the entire notion of “organic” farming was limited to a tiny number of health-conscious consumers, shopping in a handful of natural food stores. When the seven farmers who founded Organic Valley got together, they were less interested in saving the environment than in saving their skins—many had barely scraped through the farm crisis. Organic dairying seemed like a small-but-profitable niche where family farmers could comfortably support their families. Eighteen years later, the co-op is the nation’s second-largest supplier of organic dairy.
George Siemon, one of the co-op’s founding farmers (now its “C-E-I-E-I-O,” he jokes) has a laid-back demeanor, shoulder-length hair, and an easy-going drawl. During the 1980s, Siemon explains, the small, local farmers’ co-ops went out of business in large part because they never represented enough farmers to achieve sufficient economies of scale—a condition Organic Valley recognized from the beginning, and set out to overcome.

Organic Valley’s size allows it to set its own prices and guarantee farmers a fair reward for their work, whereas conventional milk prices are influenced by corporate and investor interests, which can fluctuate wildly from month to month. In the past two decades, conventional farmers have earned roughly $12 per 100 pounds of milk year after year, but at Organic Valley, prices paid to farmers have grown steadily along with consumer demand for organic milk. When the co-op first formed, farmers earned a few dollars more per hundredweight than conventional milk prices. Today, organic milk can fetch twice the price of conventional.

In part, these high prices are a function of remarkably good timing. Shortly after Organic Valley was formed, sales of organic foods began to increase at roughly 20 percent a year, and organic milk sales are growing even faster, at annual rates approaching 60 percent. Organic Valley’s growth has outpaced the market: in 1994, the co-op earned $5 million in annual sales; by last year, the figure had jumped to $334 million.
But there’s nothing in the U.S. Department of Agriculture standards about family farming. And in the past few years, organic’s juicy sales figures have attracted some of retail’s heaviest hitters, including the big cheese, Wal-Mart.

To meet growing consumer demand, some of the country’s leading organic dairy producers are adopting the same large-scale methods used on factory farms. Horizon Organic, which is owned by Dean Foods, runs an operation that has housed as many as 4,300 cows at one time. Aurora Organic Dairy, which supplies Wal-Mart, runs similar spreads. Strictly speaking, these are organic operations, in that they meet the minimum organic standards set by the USDA. Many argue, however, that the giant operations violate the spirit of the organic ethic, which implies a more personal relationship between farmers, their land, and animals.

These large operations and their economies of scale threaten to squeeze organic family farmers in exactly the same way corporate farms have. Wal-Mart, for example, has promised to price its organic foods no more than 10 percent higher than conventional foods—but lower prices on the shelf mean a leaner margin for farmers, and that can translate into cutting corners during production. Organic Valley actually was one of the first to supply Wal-Mart with organic dairy, but pulled out of the deal after a few years rather than cut prices paid to farmers.

“It does make it more difficult when you have large players pushing prices down,” says Helene Murray, executive director of the Minnesota Institute for Sustainable Agriculture. She notes, however, that Organic Valley has raised awareness among consumers about the need to pay farmers well and preserve family farms. “There’s a big demand for local foods, and you weren’t seeing that five years ago.”

At Organic Valley headquarters, Siemon remains unfazed, in part because he sees organics not as a set of USDA standards or a brand, but as a movement. A movement that is big enough, he insists, to include Horizon, the local farmers’ market, and the little patch of dirt in your own backyard. Organic Valley is focusing on encouraging young people to farm; in 2005, it launched “Generation Organic,” a range of programs including speakers, workshops, and mentorship programs.

Meanwhile, Fendry and the other co-op members are becoming part of a slow but noticeable turnaround in the number of small Minnesota farms: After 1997, for the first time in 20 years, the number of family farms began to grow, with about 3,700 new farms tallied between that year and 2002, the year of the last USDA farm census. And that’s news that leaves a good taste in everyone’s mouth.

Joseph Hart is a writer in Viroqua, Wisconsin.


Taste Test

Local Organic Milk

THREE MnMoo favorites


New Prague
The granddaddy of Minnesota milks comes from the Minar family’s third-generation farm. It’s mellow and full-bodied, topped with a dreamy dollop of pale-yellow cream.


La Farge, Wisconsin
This mix of milks from small, Midwestern farms has a slightly sweet flavor that cuts through the creaminess like a ray of sunshine.


Osceola, Wisconsin
This newcomer, established in 2003, has the truest terroir: a sharper attack with hints of pasture. Looking into Crystal Ball’s future, we see a bright one.


Distributed statewide at groceries, co-ops, and farmers’ markets. All three brands available at the Wedge, 2105 Lyndale Ave. S., Mpls., 612-871-3993.