Organic Milk Supply Falls Short
JUDITH WEINRAUB & WALTER NICHOLLS / Washington Post 1jun2005
Looking for organic milk? If you shop at Giant or Safeway supermarkets, you may have seen signs on your dairy case like this one at the Giant on Maple Avenue in Vienna last week:
"Due to a nation-wide lack of supply, there is a severe shortage of organic milk throughout the country. At this time there is simply not enough federal and state-certified production of organic milk to meet the ever-growing demand. As more farms complete the lengthy federal and state certification process, we hope that more organic milk will become available."
Safeway Inc. spokesman Craig Muckle said the company had been struggling with the same problem. "The demand goes up every day," he said.
In the past six to nine months, dairy farmers all over the country have fallen short of their buyers' total orders. Katherine DiMatteo, executive director of the Organic Trade Association, estimates that the demand is 10 percent more than the supply.
"You can't push a button and get more organic cows," said Cathleen Toomey, a spokeswoman for organic producer Stonyfield Farm. Organic certification by the U.S. Department of Agriculture takes roughly three years. The dairy farmland has to have been free of all substances prohibited by organic trade standards (such as toxic pesticides and chemical fertilizers) for 36 months, and the animals free of antibiotics, synthetic growth hormones and synthetic or genetically modified feed. (Milk from cows housed on that land during the third year of the conversion period qualifies as organic. In some cases, the three-year period can be shortened, depending on how the land was used.)
"If there had been regular growth" in demand, "we would have been able to meet it," said George L. Siemon, chief executive of Organic Valley, an independently owned national cooperative of about 700 farmers.
"But it's a very social phenomenon — what you might call an organic situation, a consumer trend that's hard to predict," he said. "Sometimes it takes fire, and sometimes it gets cool. And we don't have the ability to adjust to a changing supply and demand."
His company, for example, expected retail growth of 23 percent this year. It saw 34 percent growth, and without any warning.
"The supermarkets buy from day to day," said Siemon, who was an organic dairy farmer for 20 years. "They have no responsibility to tell me what they need in six months. Their business is to order. Mine is to deliver."
The demand for organic milk has grown enormously since it became available more than a decade ago and started to be sold almost exclusively in specialty stores.
Local stores that specialize in organic and natural products have generally not suffered from the same milk shortages as traditional supermarkets. Scott Nash, president of My Organic Market with stores in College Park, Rockville and Alexandria, said, "We're protected from a shortage because we have a local supplier for our own brand. But in the future, because money talks, the smaller retailer might be the one left out."
Consumer concerns about health have heightened in recent years — and perhaps have grown even more this year after the government released its 2005 dietary guidelines. The guidelines recommended three cups of low-fat or fat-free milk per day.
And in the past 10 years, mass-market sales of organic milk — at major outlets such as Wal-Mart and local supermarkets — have attracted an ever-expanding group of consumers. This has occurred despite a considerable difference in cost. At a Northwest D.C. Safeway on Monday, a half gallon of Horizon organic milk was $3.79; the same amount of Lucerne whole milk cost $2.19.
The Organic Trade Association projects 17.3 percent growth in the sales of organic milk between 2004 and 2008.
For dairy farmers, the problem is finding the right balance as the market grows. "We've seen shortages and oversupply throughout our history," says Organic Valley's Siemon. "Maybe we're reaching a critical mass here, where shortages last longer than they have in the past."
Horizon Organic, one of the country's leading organic food companies with 3,000 family farms across the country, also saw a larger demand than supply in the winter and early spring. But as summer approaches, Caragh McLaughlin, the company's senior brand manager, finds comfort in the natural birth cycle of cows and is optimistic about the next few months.
"The industry experienced a shortage from holiday time to April," she said, adding that her company dealt with the problem by supplying their customers 70 percent of each order. "But milk supply is a little bit seasonal. Cows naturally produce more milk in the spring and summer when they are calving, and less milk in the winter. So each cow is cranking out more milk now, and the supply has increased 10 to 15 percent."
source: http://www.washingtonpost.com/wp-dyn/content/article/2005/05/31/AR2005053100363.html 2jun2005