Producers face decline in economy, consumer trust

By CAROL RYAN DUMAS

Capital Press

TWIN FALLS, Idaho -- The viability of their industry was the top issue for the 150 producers who gathered for the Western Organic Dairy Producers Alliance's convention.

A highlight of last week's convention was a panel of dairy processors that addressed producers' questions on how to get through the economic downturn and grow the industry in the future. The panel was united in its advice: The organic industry must protect the organic seal, set and enforce standards, educate consumers, market new products and manage supply.

Despite the current hard times, the experts encouraged organic producers to look ahead.

"We need more market penetration," said Tim Griffin, national dairy recruitment manager for Organic Valley Organic. "Sales are flat."

Despite the economic downturn, it's important to keep marketing, educating the consumer and launching new products, said Kelly Shea, vice president of organic stewardship for Dean Foods' White Wave-Morningstar.

At the same time, producers need to protect the organic image.

Marcus Benedetti, president of Clover Stornetta Farms, said a processor's biggest single factor in attracting new customers is producers who meet consumers' expectation for organic dairy products. That story of who produces the milk and how it is produced is one that needs to be constantly told.

According to Shea, the biggest threat to the industry is maintaining the integrity of the organic seal. Confidence in the seal has eroded because organic standards and certifiers are not consistent.

"We need to build back consumer confidence and push back on those who say organic isn't really organic anymore," she said.

Benedetti warned that some consumers wonder if a product is truly organic and if it's worth paying more for.

That could lead to an erosion of the organic premium in the marketplace and in producers' revenue, Griffin said.

"It's very important that we maintain that," he added.

At the heart of the issue is regulation.

"When it came to funding NOP (National Organic Program), it was like pulling teeth," Shea said. "It's underfunded and under-resourced."

The program is set to receive $6 million so USDA can hire more employees to address compliance, enforcement and train certifying agents.

The industry has worked with USDA to address origin of livestock and pasture standards, she said.

Benedetti said producers need to draw from the conventional industry and not make the same mistakes. They need to stay inclusive, tackle the issues together and knock on doors in Washington, D.C.

As for milk prices, which have dipped to as low as $16 per  hundredweight, processors expect that to bounce back.

Shae said through marketing, education and a return to a healthier  economy, she thinks the price will return. Her company will continue launching new products, marketing and getting the regulations fixed.

The industry will not return to 20 percent annual growth, but will see 5 percent to 10 percent growth, Griffin said.

"There's good times ahead, but it'll be much more moderate growth," Griffin said.

Staff writer Carol Ryan Dumas is based in Twin Falls. E-mail: crdumas@capitalpress.com.

 

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