From: Sharon Kiley Mack, Bangor Daily News, Maine
Published September 27, 2004 12:00 AM

Maine Dairy Farms Find Success with Organic Milk

Sep. 27—TURNER, Maine — When Gloria and Gregg Varney bought their third-generation dairy farm in Turner 17 years ago, they never dreamed they would pioneer a revolution that has changed dairy farming in Maine.


In the summer of 1994, Stonyfield Yogurt of New Hampshire set up a regional meeting at the Varney farm to extol the virtues of producing organic milk.


"Four or five farmers showed up," Gloria Varney recalled recently. "We were the only ones that took the plunge. The others watched us for five years to see if we would fail."


They didn't. In fact, they thrived. The Varneys now milk 100 head a day and get 59 percent more for their milk than Maine's conventional farmers.


Organic farming used to be about saving the planet. Now it's about saving the family farm. Boosted by the Varneys' success, two out of the five dairy farms left in Turner today are organic, part of a national trend.


Although organic milk still accounts for less than 1 percent of the U.S. milk market, it is a segment growing at an exponential rate. The number of certified organic cows in the United States increased by 277 percent between 1997 and 2004, according to the Organic Trade Association.


While the national organic dairy market is increasing at 20 percent per year, the conventional dairy market is decreasing by 3 percent annually, said the OTA.


In Maine, organic milk accounts for more than 16 percent of the state's total milk production and more than 50 of Maine's remaining 375 dairy farms.


"Organic dairy is growing faster in New England than anywhere else," said Sue McGovern of Organic Valley, the New Hampshire-based cooperative that purchases the Varneys' milk.


"Organic is a niche, but a very profitable niche," said Jerry Dryer, a consumer watchdog with Prepared Foods, a national organization. "Give consumers what they truly want or need and they will dig deeply into their pockets.


"Organic dairy is mainstream. Two-thirds of the organic milk and cream is delivered to consumers via conventional supermarkets, not the health-food stores frequently associated with the organic of days gone by. Half of the organic cheese and yogurt sold in this country passes through a conventional supermarket," he noted.


"Organic is here to stay, not a fad marching by in the night. Several dairy companies have their arms around the organic segment of the business," Dryer continued. "Others will likely get involved."


To be certified organic, a dairy farmer can't treat the cows with antibiotics or hormones and must feed them grain and hay grown without herbicides, pesticides or chemical fertilizers. By meeting these tests, organic milk producers frequently get top dollar for the milk, often more than twice the price of conventional milk.


And while conventional milk prices fluctuate wildly, the price of organic milk has held steady. More and more farmers, even some who once dismissed organic farming as a New Age philosophy, are changing their tune, believing their survival could now be linked to organic milk.


Varney said this trend is totally consumer-driven. Retail sales of organic dairy products are growing about 20 percent a year, even though a gallon of organic milk costs more than regular milk.


She said organic consumers believe that organic milk is more healthful because it comes from cows that aren't treated with antibiotics. The secondbiggest reason consumers buy organic milk is its taste.


Lured by the growing success of organic dairy, giant food manufacturers are now trying to gain a foothold in the market.


Maine's organic milk primarily goes to two national marketers — CROPP Cooperative and Horizon Organic Dairy. Members of the CROPP Cooperative produce fluid milk under the Organic Valley label. They also wholesale milk to Stonyfield Farm for yogurt. Horizon Organic Dairy produces fluid milk under the Organic Cow label. Several smaller farms bottle their milk on-site and sell directly to consumers and local retailers.


Recently, national food giant Dean Foods purchased Horizon; Hoods has announced a new organic milk; and General Mills, Dannon, H.J. Heinz, Kraft, Kellogg and Nestle have all purchased small to midsize organic-food labels over the past four years.


Many organic dairy farmers worry that the influence of bigger players will damage the organic ethic, maximizing shareholder value rather than farmer value.


"That's why we sell our milk to Organic Valley," said Varney. "We feel as strongly about Organic Valley today as we did in the beginning. The fact that it is a farmer-owned cooperative means a great deal to us." Varney said that in the rush to acquire organic producers, Organic Valley "will come out on top because they truly support small family farms."


And after all, she maintained, it is the small, family operation that is luring consumers to the organic market.


"There is a big desire by consumers to understand how and where their food is produced," she said. "They are getting fed up with large shareholder companies having very little direct connection with them."


As people move farther and farther away from an agriculture-based economy, they are becoming more and more concerned about who produces their food.


"When Greg and I went to school, all of our families had a farm," she recalled. "I'm one of 75 grandchildren and the only one farming." Consumers are seeking that connection to the farm that has been lost, she said. "It works for us — financially, spiritually and philosophically for my family."


As Varney talked, a pair of women left her store and headed across the street towards the milking barn to visit the cows. "You see that? That is the appeal of organic. This isn't a showplace. This is a real working farm."


To see more of the Bangor Daily News, or to subscribe to the newspaper, go to http://www.bangordailynews.com.


© 2004, Bangor Daily News, Maine. Distributed by Knight Ridder/Tribune Business News.


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