Largest Organic Milk Producer Uses Small- Farmer Exemption To Cut Costs

Aurora Organic Dairy is the largest organic milk and butter producer in the country, keeping thousands of cows at facilities mostly in Colorado. According to the company's web site, its
"new model" of organic production on a large scale meets "the fullest promise of (the) organic movement." Because of its nationwide distribution, Aurora produces private label and store brand organic dairy products for giant retailers including Wal-Mart, Costco, Target & Safeway.

But the company's self-congratulation has been met with boos and hisses from family-size organic milk farmers and organizations that represent them. These small-scale competitors charge that Aurora wants it both ways: produce on a large scale but claim a financial exemption meant to help small farmers.

The issue, however, is not the first controversy to blow through Aurora.

• In April, 2007, the U.S. Department of Agriculture proposed to revoke Aurora's organic certifications. The U.S.D.A. said it had found 14 "willful violations" of organic regulations including such basics as not giving cows sufficient access to pasture.
  
• Instead of filing an appeal, which would have created an open proceeding and a record of testimony and is the usual next step in such cases, Aurora immediately began negotiating with the Bush Administration officials then heading the agency.
• In August, 2007, Aurora signed a consent agreement with the government in which it agreed to make changes in its operation, but admitted no wrong-doing. The government also gave Aurora cover against charges that some of the milk it had been selling had not actually met organic guidelines. It did this by saying that the company's certifications were valid, thus making is possible for Aurora CEO Marc Peperzak to proudly declare, "Our milk is and always has been organic."
• Critics called the settlement a whitewash, and in October, 2007, class action lawsuits alleging fraud by Aurora were filed.
  

With those lawsuits still pending, Aurora had to defend itself again this May at new USDA hearings about the seemingly esoteric "producer-handler" exemption. Production of milk in the U.S. is governed by very old laws intended to protect family farmers. One aspect of these laws is to exempt small dairy farmers who bottle their own milk from paying into a national fund used to promote milk consumption.

Aurora has claimed this exemption. According to Mark Kastel, senior farm policy analyst for the Cornucopia Institute, an advocacy group, this has saved Aurora millions of dollars, enabling it to undercut prices and threaten the livelihood of family farmers.

I contacted Aurora to get their side of this story. I wanted to know why they think they deserve to use the exemption, just how much money it saves them, and basic information like how many cows they actually raise. I wanted to interview someone at the top, preferably CEO Peperzak or President Mark Retzloff, who both proclaim their dedication to creation of sustainable systems of food production and the principles of the organic movement.

They declined my request, instead having an outside public relations representative forward an email to me. "We have no interest in responding to the latest round of baseless claims by Cornucopia Institute," it read. "Cornucopia has made clear that it is trying to run Aurora Organic out of business in order to drive up the price of organic milk."

So the acrimony continues while the U.S.D.A.'s hearing officer contemplates the testimony he recently heard before rendering a decision.

If you're a buyer of organic milk, it's up to you make up your own mind about all this. If you don't like what Aurora is doing, or think it's just fine, let them know. Here's their phone #: 720-564-6296.