By Steven Gray

Thursday, Aug. 30, 2007

Once the province of epicures and health nuts, organic food has gone mass market. Americans spent some $16.7 billion on organic food last year, up from $13.8 billion in 2005 — and sales are expected to rise by 20% this year. But some aspects of organic's growing popularity trouble advocates like Mark Kastel, 52, from Rockton, Wis., who is now driving one of the food industry's biggest debates: does organic food's industrialization threaten its purity?

Kastel lives in a sparse, white two-story house across from an organic dairy farm in the rugged hills of southwestern Wisconsin. A former farm-equipment salesman, Kastel has become a leader of the organic-food movement. In 2004 he helped found the family-farm advocacy group Cornucopia Institute, which has filed seven complaints with the U.S. Department of Agriculture (USDA) over the last two years — against Wal-Mart and some of the nation's largest organic milk producers — for failures to meet federal organic standards.

Cornucopia's first complaint, filed in January 2005, alleged that the Platteville, Colo., farm owned by Aurora Organic Dairy, one of the nation's largest organic milk producers, confined thousands of organic cows in factory-like conditions with little access to pasture for grazing. Cornucopia followed up with two other complaints regarding Aurora's operations.

On Wednesday, the USDA announced its investigators had found that Aurora failed to keep proper records about how its cows were raised, and mixed regular cows with organic cows. The government and the company reached an agreement under which the company will be allowed to keep its organic certification if it makes adjustments that include reducing the number of its cows — from about 2,200 to 1,200. The farm also plans to expand its grassland to about 400 acres from 325. Clark Driftmier, a spokesman for Aurora, said these plans had been in the works for at least two years and that its customers — whom he declined to name — have expressed support. Says Bruce Knight, undersecretary for marketing and regulatory programs at the USDA: "We'll be looking over their shoulder for the next year, and if they fail to come into full compliance, we'll be taking serious action."

In another complaint last year, Cornucopia alleged that Wal-Mart's in-store signs had incorrectly identified some products as organic. The company said it was an "isolated incident." So far, the government has closed five of Cornucopia's complaints, including the one against Wal-Mart, and is reviewing the two others. But after Wednesday's announcement of the Aurora agreement, Kastel says he feels vindicated.

Dairy is the second-fastest-growing segment of the organic-food industry, after meat. In 2006, Americans spent $2.7 billion on organic dairy products, up from $2.1 billion the previous year, according to the Organic Trade Association.

Under current federal guidelines, set by the USDA's National Organic Program, organic cows must have access to pasture, although how much is fiercely debated. So, a farm with 10,000 cows is as organic as one with 10 cows. But the growth of large-scale organic farms with thousands of cows has drawn the ire of purists like Kastel.

Last year, Cornucopia issued its first organic dairy industry "report card," grading about 70 producers and brands on a scale of one to five "cows." High marks went to small organic milk-producing operations like the family farm Organic Pastures, near Fresno, Calif., which has donated money to Cornucopia and supplies milk to Whole Foods. Organic Pastures received a "five cow," or "outstanding," rating. Large brands like Whole Foods' private-label 365 organic milk got ratings of "good," but with "questionable long-term commitment to organics." Cornucopia says it later upgraded Whole Foods' rating to a four-cow, or "excellent," rating, after the company said the bulk of its private-label organic milk came from family farms.

News of Cornucopia's report card traveled quickly; Kastel received a flood of e-mails and phone calls with tips. He developed a network of what he calls "intelligence officers," including staffers at organic dairy farms and supermarkets, as well as ordinary consumers.

Dick Parrott, 65, is one of Kastel's informants. Parrott raises grass-fed organic beef on a 500-acre farm near the Nevada-Idaho border, about 40 miles from the Horizon Organic dairy farm. After reading one of Cornucopia's newsletters, he e-mailed Kastel with concerns that Horizon wasn't meeting federal organic regulations — in part because its operations were so big. He began driving his pick-up truck to the Horizon farm, camera in hand. "You can drive around and see the cows aren't in pasture," says Parrott.

"You could recognize the milking barn, and a couple hundred cows standing up to their ankles in manure," Parrott says. He sent pictures to Kastel, who posted them on Cornucopia's website. A Horizon spokeswoman says the photos may have shown cows standing in mud after rain.

Joseph Scalzo, chief executive of Dean Foods' WhiteWave, which manages the Horizon Organic brand, invited Kastel to the company's Idaho farm in June 2006. Scalzo outlined the company's plans to spend at least $10 million expanding the farm's pasture, enabling cows to graze at the same time. But by that visit, Cornucopia had already embarked on its report card project — and had mailed Horizon and other farms its survey with 19 questions, ranging from how many cows were on a farm to whether they were treated with antibiotics. Scalzo says Horizon declined to participate in the survey because it "was unprofessional and unscientific." Cornucopia gave Horizon a "one cow" rating, deeming it "ethically challenged."

After Cornucopia issued its report card, the Organic Consumers Association e-mailed some 380,000 organic food devotees calling for a boycott of Horizon milk. Dozens of food co-ops pulled the milk from their shelves. Horizon responded with ads in publications popular with organic-food advocates, like the Utne Reader, showing cows grazing in lush fields. Scalzo says, however, the boycott barely affected his company's sales, and that activists like Kastel cast doubt on the entire organic-food movement. "This is eroding consumer confidence in the business, this industry and the family farms he's a self-proclaimed advocate for," says Scalzo.

Kastel scoffs at criticism that he's out to get big organic producers. "We should welcome corporate investments — it's only good for organics if they subscribe to the same foundational premise that's made this economically successful," he says. Now, he's looking beyond organic milk — to chicken, wheat and soybeans. "There's a higher authority than the USDA," Kastel says. "And that's the consumer."

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