WisBiz In-Depth: Wisconsin a leader in organic agriculture
9/28/2004

By Gregg Hoffmann

Gov. Jim Doyle knows a good thing when he sees it. That's why the governor has started a special task force on the organic agriculture industry in Wisconsin.

The state is a leader in several ways in the growing industry. Wisconsin has the third most organic farms in the country, ranking behind only California and Washington.

State dairy producers raise 22 percent of the nation's organic milk cows. Those farmers get a price premium that ranges from 80 to 115 percent more than conventionally produced milk.

The Cooperative Regions of Organic Producer Pools, doing business under the brand name of Organic Valley, is the top-ranked organic cooperative in the country. The co-op was recently profiled in a WisBiz In-Depth column.

Home Grown Wisconsin, initially formed by 25 southern Wisconsin farmers in 1996, markets organically grown produce from its member farms to restaurants in Madison, Milwaukee and Chicago.

"Clearly, organic production is adding value to the state's economy and has the potential to grow as Wisconsin urbanizes, nearby metro areas thrive and demand from more distant markets grows," wrote Matt Mariola of the Nelson Institute for Environmental Studies and Michelle Miller and John Hendrickson of the Center for Integrated Agricultural Systems.

The three UW-Madison researchers collaborated to produce "Organic Agriculture in Wisconsin: 2003 Status Report."

In the report, the researchers emphasized that while organic products still represent a relatively low percentage of overall food products, they are growing in popularity.

"Organic food sales in the U.S. have grown 20 percent or more annually throughout the last decade and remain strong," reads the report. "Organic products are now available in 73 percent of supermarkets nationwide, particularly in urban and suburban regions.

"While organic sales currently account for less than 2 percent of total food sales in the U.S., sales are stronger in European markets. Sales growth for organic products has caught the eye of business giants such as Dole, General Mills, Dean Foods, Unilever and other market-savvy processors.

"Some states, such as Minnesota, Iowa and Michigan, are following these trends by investing in organic marketing, research and extension to support growth in this value-added industry."

Existing government assistance

Exploring some form of state assistance is one assignment of the governor's special task force in Wisconsin. Some government assistance already has been given to special projects.

For example, the new CROPP headquarters received a $750,000 grant from the Department of Commerce and a $2.8 million loan from the U.S. Department of Commerce. The village of La Farge also created a special tax district to give the co-op $1.5 million for the new headquarters.

The state Department of Agriculture, Trade and Consumer Protection has funded an Agricultural Development and Diversification grant program for more than 10 years. Fifteen organic projects in the state had received $238,410, according to the status report in 2003.

DATCP also has worked with the USDA organic cost-share program to help organic farmers recover up to 3/4 of the cost of becoming certified under the federal organic guidelines. As of 2003, 100 farms or companies had completed the certification process, with another 300 going through the process.

University research is growing in the organic field. Several scientists at UW-Madison are concentrating in the area.

Four research stations in the UW system were developing organic sites as of 2003. Other university groups involved in organics included the Center for Cooperatives, the Program on Agricultural Technology Studies, the Wisconsin Integrated Cropping Systems, plus the two groups that did the 2003 status report.

"More research in the organic industry is needed," said Jerry McGeorge, cooperative coordinator for CROPP. "It's very exciting to be working with the university and others around the state."

Some non-profit organizations also work with the organic industry. The Midwest Organic and Sustainable Education Service provides a variety of services and holds a three-day conference in organic farming in La Crosse.

The Michael Fields Agricultural Institute is committed to promoting resource conserving and ecologically sustainable and economically viable food and farming systems. The Organic Alliance, based in St. Paul, does a fair amount of work in Wisconsin.

The Madison Area Community Supported Agriculture Coalition is made up of consumers and organic farmers in south central Wisconsin working to build sustainable relationships among farms, local communities and the land.

Where are the farms and markets?

The greatest concentration of organic farms can be found in the southwest part of the state, according to the 2003 status report. Seven counties had over 15 certified organic farms. Vernon County claimed more than 100, nearly four times the next closest county.

USDA reported that from 1997 to 2001 organic production in Wisconsin increased 92 percent. Organic soybean production rose 235 percent. Organic grain increased 105 percent.

The livestock area increased the most dramatically. Organic beef production increased 1,298 percent in the time frame studied. Milk cows went up 331 percent, and poultry soared 2,559 percent.

Still, organic soybeans in Wisconsin represent roughly 2.5 percent of the total soybean acres. Organic livestock comprises less than 1 percent of the state's total. So, total percentages remain small for organic products, but the increases cannot be denied.

The organic industry has improved its processing through certification. Several organic certifying agencies certify processors in addition to individual farms. The Midwest Organic Services Association is Wisconsin's largest certifying agency, certifying 41 organic processors in 32 cities as of 2003. See arecent WisBiz In-Depth on MOSA.

Cooperatives provide good markets for organic products. The UW Center for Cooperatives listed 31 natural foods cooperatives in 28 cities in the state. All featured some organic products.

The natural foods web site GreenPeople listed an additional 14 privately-owned natural food stores in 13 different Wisconsin towns, according to the 2003 status report. The world's largest retailer of natural and organic foods, Whole Foods, has a store in Madison. Many organic farmers also sell direct to consumers at farm markets around the state.

A profile of the typical organic consumer, prepared by the Hartman Group in 2000, was a married woman in her 40s with a household size of 2.7 and a mean income of $47,000. Organic consumers also tend to be urban and suburban, although the main production centers in Wisconsin are in the more rural parts of the state.

While dairy has led the way in state organic products, fresh produce is the top-selling organic category in the country, followed by non-dairy beverages, breads and grains, packaged foods and dairy products. Led by CROPP, Wisconsin saw a 500 percent increase in organic dairy products from 1994-1999.

Large grocery chains have noticed the increased demand in organic products and, especially since concerns about bovine growth hormone and mad cow disease surfaced, have expanded organic areas of their stories.

What will be interesting to see, however, is how organic producers and processors mesh with the larger supermarket corporations. Just a couple years ago, for example, CROPP was approached about forming alliances with some large companies, and the co-op's board rejected the proposal.

Board members expressed concerns about compromising the integrity of the Organic Valley brand and the co-op's mission to work with family farmers. Other organic producers and processors tend to resist corporate pressures and mistrust big business.

Consider this quote in the CROPP 2003 annual report: "My job isn't just about making money anymore. I work for Organic Valley because I believe in what we do. It's a great feeling to love who you work for and feel a sense of giving back, not just filling stockholders' pockets." Michelle Badker, sales.

That tension between the tradition of the organic industry and big business might end up as one of the challenges for the governor's task force.




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