What's organic and what's 'natural'?

Monday, October 5, 2009

Organic milk producers in the United States, already under financial stress as sales flattened, went ballistic in the summer when word got out that the largest organic milk processor, Dean Foods Inc., based in Dallas, intended to set up a new, lower-priced category called "natural dairy." Organic producers charge it is attempting to pirate away organic consumers who can't tell the difference between regulated "organic" brands and unregulated "natural."

Under its Horizon brand, Dean had already switched production of its soy drinks to conventional soybeans from organic (and labelled it natural), a move organic producers believe went  largely unnoticed. Critics say Horizon, with the largest dollar-value volume of sales of any organic brand, has informed some producers it won't renew purchase contracts.

Organic dairy farmers convinced Secretary of Agriculture Tom Vilsack to attend an emergency rally in Wisconsin in mid-July. It remains to be seen what the U.S. agriculture department can do for producers.

Dairy economics in the United States as a whole continue to go sour. The price for Class III milk needs to get to $15-$16 per hundredweight to relieve financial stress on producers, says Bob Cropp, professor emeritus at the University of Wisconsin-Madison. That might not happen until next year. In July, the Class III price was barely $10. BF