Organic Milk in Short Supply

Got Milk? Some supermarkets are having trouble stocking organic milk as demand has outstripped supply. And strict organic regulations make it difficult to increase production. Michele Norris talks with Vermont dairy farmer George Siemen, CEO of Organic Valley.

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MICHELE NORRIS, host:

If you've been in the dairy aisle of a supermarket recently, you may have noticed some bare shelves in the organic milk section. Grocery stores, especially in the Northeast, are having problems keeping organic milk in stock. Organic milk is free of antibiotics or growth hormones, and demand for the products has grown steadily while conventional milk sales have been on the decline. It's a trend that has surprised grocery analysts, since organic milk typically costs up to $1.50 more.

George Siemen is the CEO of Organic Valley, one of the nation's largest organic milk suppliers. We caught up with him at company headquarters in La Farge, Wisconsin, to find out what's behind the shortage.

Mr. GEORGE SIEMEN (CEO, Organic Valley): The demand has always been growing at a pretty steady rate, and we've been able to keep up with it. But of course as the business gets bigger and bigger and we get more and more of the farmers that were leaning that way have gone that way, it's just got harder and harder to convince farmers to go over. Plus last year we saw a definite spike in the demand that kind of tilted us over to the point of shortage.

NORRIS: So this is curious. Demand is on the rise and yet you're having a hard time convincing farmers to go into organic farming?

Mr. SIEMEN: Mm-hmm. Well, that's because, you know, going organic is a frame of mind, and there's just so many farmers that are interested in that. And of course no matter what we try to do, organic milk doesn't just happen in a minute. It can take as long as four years for a farmer to make that conversion. And that's a pretty big commitment.

NORRIS: Are there other things that perhaps are spooking the farmers? Are they concerned about the certification process?

Mr. SIEMEN: Of course farmers don't like paperwork and new processes. So certification's one of the many hurdles they've got to jump over to go organic. Another factor is conventional milk has been very high in the last year, and conventional feed has been very low. So that's made regular dairy farming more profitable, which doesn't--as much encouragement maybe as other years it's had.

NORRIS: Well, look into your crystal ball. What do you expect to see in coming months?

Mr. SIEMEN: We hope to catch up, but organic is a social phenomenon. And it might be that the market could grow faster than we expect, and we might have continued shortage. So my crystal ball is not very clear, Michele.

NORRIS: George Siemen, thanks so much for talking to us.

Mr. SIEMEN: Thank you. It's my pleasure.

NORRIS: George Siemen is the CEO of Organic Valley. That's one of the largest organic milk cooperatives in the country.

We thought we'd go one step closer to the root of the shortage by talking to a man who actually milks the cows. Travis Forgues is one of those men. He runs a small organic dairy farm in Alburg Springs, Vermont, up near the Canadian border, and sells his milk to Organic Valley.

Mr. Forgues, thanks for being with us.

Mr. TRAVIS FORGUES (Organic Dairy Farmer): Well, thank you for having me.

NORRIS: So, from your point of view, what's the explanation behind this milk shortage?

Mr. FORGUES: Demand is just totally blowing away supply. So we've run into a situation right now where we don't have the milk, and the farmers are not transitioning as fast as we need them to--the numbers--'cause it isn't an overnight fix. You know, this is three years for the fields to become certified, and a year to get your animals certified. So, you know, the short term is not going to be, you know, any more pleasant of a picture than it is now in the milk world. But slowly we should be able to get this back into control and get the milk out there that we need.

NORRIS: What's behind this surge in demand? How do you explain it?

Mr. FORGUES: You know, I've been blessed with being able to talk to a lot of people that are kind of switching over to buying organic products, and the number-one segment is mothers. And people really feel that organic milk offers them some security in the respect that they know that we aren't putting chemicals on our fields, that there's no synthetic hormones or antibiotics being used on our cows. People feel good about that. And so they're willing to pay a price to get that kind of product into their systems and into their children's systems.

NORRIS: Travis Forgues, it must be interesting when you head to the general store there in Alburg Springs. I doubt that many farmers share this problem that their product is just too popular.

Mr. FORGUES: Yeah, you don't hear that. (Laughs) So it's been a really--it's a wonderful run, and you really can't put a price on having ownership of a label and knowing that when you go into a store shelf--you know, when you see Organic Valley milk there, that's your milk. It's a wonderful experience, and it's something that should really entice farmers to look at, you know, being part of an organic system.

NORRIS: Mr. Forgues, thanks for talking to us.

Mr. FORGUES: You're welcome.

NORRIS: Travis Forgues runs a small organic dairy farm in Alburg Springs, Vermont.

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