In 2009, Organic Valley's farmer-owners, who like all farmers are facing the deepest and longest recession in more than 50 years, demonstrated once again the strength and resilience of the cooperative business model that has made Organic Valley a brand trusted by consumers and retail partners alike.
Sales for the nation's largest organic farmer-owned cooperative were $520 million in 2009, down l.3 percent from 2008. Though Organic Valley remained profitable, it was the first time the cooperative, which formed in 1988, has experienced lower year-over-year sales.
"In the context of job losses, declining home values and other enormous economic pressures, we believe the relatively small decline shows that consumers remain committed to both organic food and the family farmers who produce it," said George Siemon, chief executive officer and founding farmer at Organic Valley.
Siemon also credited Organic Valley's farmer members for pioneering difficult steps in 2009 to help safeguard the cooperative's financial strength and preserve organic family farms.
Beginning in July, for example, Organic Valley farmer-owners reduced their milk output by 7 percent. That allowed the cooperative to maintain a stable pay price at a time when conventional and other organic milk producers were slashing pay prices, forcing farmers to subsidize artificially lower retail prices.
"You cannot save organic family farms by paying farmers less than the cost of producing their milk," Siemon said.
Last fall, that same principle—saving organic family farms—inspired Organic Valley's parent, CROPP Cooperative, to begin managing about 270 organic milk contracts currently handled for Stonyfield by HP Hood, a dairy processor headquartered in Lynnfield, Mass. Hood, having decided to exit the organic milk business, asked CROPP to take over their farmer contracts, giving the farmers the option of joining the cooperative.
Siemon said Organic Valley's farmer-owners have been supportive of CROPP's efforts on behalf of the former Hood farmers. "Once again, cooperatively pooling production proves to be the best way to safeguard the financial sustainability of organic farmers."
The Year Ahead
According to the U.S. Census Bureau, retail sales fell 8 percent through the first 11 months of 2009 versus 2008. With job losses continuing to mount, few economists expect dramatic changes in consumer behavior in 2010.
But a variety of recent reports suggest that consumers continue to regard organic goods as essential. Market research firm Mintel, for example, said recent survey data showed that nearly 40 percent of consumers claimed they hadn't changed organic-product purchasing habits because of the recession and only 3 percent had stopped buying organic products altogether.
"Though they remain cautious, consumers don't see organic food as a luxury item," Siemon noted. "They see it as essential to the health of their families and our planet."
Organic Valley will continue to work with retail and institutional partners in 2010 on promotions that educate consumers on the healthful, environmental and economic benefits of purchasing organic.
In 2010, Organic Valley will continue to conduct and support cause related initiatives such as Earth Dinner (www.EarthDinner.org), Farm Aid (www.FarmAid.com) and Kickapoo Country Fair (www.kickapoocountryfair.org) to reinforce consumer loyalty to organic and highlight the essential role of the family farmer.
Download an Organic Valley 2009 fact sheet.
Organic Valley Family of Farms: Independent and Farmer-Owned
Organic Valley is America’s largest cooperative of organic farmers and is one of the nation’s leading organic brands. Organized in 1988, it represents more than 1,400 farmers in 33 states and 3 Canadian province, and achieved $520 million in 2009 sales. Focused on its founding mission of saving family farms through organic farming, Organic Valley produces a variety of organic foods, including organic milk, soy, cheese, butter, spreads, creams, eggs, produce and juice, which are sold in supermarkets, natural foods stores and food cooperatives nationwide. The same farmers who produce for Organic Valley also produce a full range of delicious organic meat under the Organic Prairie Family of Farms label. For further information, call 1-888-444-MILK or visit www.organicvalley.coop, www.organicprairie.coop and the cooperative’s farmer website, www.farmers.coop. Organic Valley is also on Twitter @Organic_Valley, and Facebook www.facebook.com/OrganicValley.