As you come over the hill into
La Farge, Wisc., population 766, you might not think you had arrived
in the hometown of a company that posted more than $200 million
in sales in 2004. There's a wide main street, an IGA, a lumberyard—a
typical small town in the Upper Midwest, you think. Then you correct
yourself: a prosperous small town in the Upper Midwest. Not so typical.
Since 1988, La Farge has been home to the Cooperative Regions of
Organic Producer Pools—better known to locals as CROPP; better
known to the general public by its retail label, Organic Valley.
Today the cooperative is one of the shining stars of the organic
movement—a farmer-owned and –directed company whose
growth has kept pace with the bigger, corporate-organic food labels
and whose founders have managed to balance that growth with adherence
to their originating principles.
The cooperative currently includes 689 farmers in 20 states, and
has diversified from vegetables (the acronym CROPP originally stood
for Coulee Region Organic Produce Pool) to dairy, juice, eggs, meat
and soy products. Sales have exploded, from $28 million in 1998
to $156 million in 2003 to $206 million in 2004, while pay prices
to farmer-members, particularly for milk, have stayed well above
conventional prices and have also showed greater stability from
month to month and year to year.
No doubt in part because this is a traditional dairy region, Organic
Valley's dairy segment has seen the most dramatic growth and dominates
the coop's public image. In addition to fluid milk, they market
a wide range of organic dairy products, including buttermilk, whipping
cream and a dozen kinds of cheese. One method by which the coop
has sought to distinguish itself from its competitors is by creating
regional production and marketing linkages, so that milk from New
England dairies is marketed under a New England Pastures label,
Rocky Mountain milk under a Rocky Mountain Pastures label, and so
on (other regional labels include Northeast Pastures, Northwest
Pastures, Texas Pastures and California Pastures).
Missing from that list, you'll notice, is Midwestern Pastures,
but if you live in the Midwest you can be confident you're drinking
milk from your own region. Demand for organic milk is highest on
the Coasts, CROPP representatives explain, whereas supply is concentrated
in the Upper Midwest--a situation created as much by demographics
as by consumer preferences. Just as Wisconsin's conventional dairy
sector has survived by specializing in cheese, CROPP makes most
of its nationally distributed organic butter and cheeses from Midwestern
organic milk--thereby creating a concentrated, higher-value product
for shipping and helping to even out the continental dairy imbalance.
As a result, not only Wisconsin farmers, but also Wisconsin dairy
processors--and in turn whole communities--have benefited from CROPP's
Organic butter junction
Organic Valley's positive economic influence is clearly visible
30 miles to the west of La Farge, in the hamlet of Chaseburg. When
Organic Valley acquired the Chaseburg Creamery six years ago it
had been closed for 28 months—"a long time for a small
town like this," as the current creamery manager, Dave Larson,
notes, drawing a deep breath.
Today, with a population of just 302, Chaseburg supports a church,
a bank, a taxidermist, and a café, in addition to the creamery.
Just as important as the jobs the creamery represents, Larson emphasizes,
are the plant's contributions to the local tax base. "I'd say
we provide about 80 percent of the payments for the water supply
and septic facilities here," he estimates.
Nearly all of the plant's 30-or-so jobs are held by people local
to the area. Larson himself lives six miles away. In addition to
being the Chaseburg plant manager, he's also a farmer and an Organic
Valley producer-member, milking 32 cows and maintaining 3,200 laying
Larson's job involves a good deal of traffic coordination. The
plant's central location "serves as a tipping point for Organic
Valley operations" in the United States, he explains. "We
operate very much as an on-demand facility, making up shortfalls
in the East and the West" as needed. The facility produces
about 22,000 pounds of butter a day, packing under the Organic Valley
label as well as store-brand organic butter labels like Trader Joe's,
one of the creamery's bigger customers. With just one, modest-sized
storage cooler at the end of the packing line, Larson relies on
a steady stream of trucks shipping butter out, as well as bringing
milk in, to keep the process moving smoothly. "It really requires
a lot of teamwork," he emphasizes.
Like CROPP as a whole, the creamery has had to cope with constant
growth. "I don't remember a single month in which we haven't
been involved in some kind of expansion or renovation," says
Larson. When New Farm visited, construction was underway to create
a truckers' lounge (so drivers have a place to wait while their
milk is being unloaded) and to install a bulk cleaning-solution
system, with large fixed tanks taking the place of removable 55-gallon
You can track the plant's expansion by looking at the milk-storage
silos rising from the back of the creamery, Larson points out. Initially,
they installed a 20,000-gallon silo; next to that stands a 30,000-gallon
silo, installed sometime later; next to that, the most recent addition,
a 40,000-gallon silo. Today the creamery has a total storage capacity
of 750,000 pounds and is processing between 280,000 and 600,000
pounds of milk a day. With no room for more silos, there's talk
of replacing the original, 20,000-gallon silo with a 50,000-gallon
Good as gold
After we suit up in long white coats and hair nets and walk through
the shoe sanitizer, our tour proceeds backwards through the plant,
from finished to raw product, to ensure that we don't track contaminants
from the beginning of the line to the end.
The main production floor is a large square room with a terracotta
floor and big banks of glassblock windows. In the center of the
room stands an enormous stainless steel churn, a giant horizontal
spatula on wheels to remove the butter from the churn, and a boat,
or trough, into which the spatula unloads its haul. To one side
are five upright tanks in which the cream is held prior to entering
the churn; to the other is the packing line, where the butter is
squeezed and pressed into waxed-paper-covered sticks and the sticks
in turn are packed into one-pound paperboard boxes.
Most of the people at work in the room are tending the packing
line, but the area in front of the churn is the domain of Chaseburg's
buttermaker, Tom Tollackson. Each churn-load uses 7,000 pounds of
cream and yields about 3,500 pounds of butter. "Batch churns
[like this one] are a rarity nowadays," Larson yells above
the din of the machinery. "Most plants now operate continuous-production
churns. These were originally made in Québec. Now you'd probably
have to go to Mexico to find one." When the coop went shopping
for equipment for the creamery six years ago, he notes, they bought
two so they'd have a spare. Even so, they've had to have replacement
It takes about an hour and a half to make a batch of butter in
the churn. First the cream thickens into whipped cream; then, after
the 30 or 40 minutes the butter starts to 'break' or separate out
from the residual liquid. The buttermaker then drains the buttermilk
off and continues churning the butter until it reaches the right
texture and firmness.
"It's much like cooking," Larson comments. "Anybody
can follow a recipe, but that doesn't mean it's going to come out
right." "Our producers do a really good job of ensuring
consistent quality milk," he goes on. Even so, when pastures
get lush in the spring and fall the cows produce larger volumes
of lower-fat milk, "and the butter acts differently. That's
where Tom's skill comes in."
The Chaseburg Creamery makes two types of butter: a salted, uncultured
butter and a cultured, unsalted butter. Salted, uncultured butter
is what most people are used to eating. The salt—in this case
an approved-for-organic flake salt at a rate of 1 ½ percent—brings
out the butter's flavors while also acting as natural preservative.
Cultured butter has active bacterial cultures added to it, just
like yogurt. Traditionally, Larson explains, cultured butter is
unsalted, since the culture acts as a preservative agent in place
of the salt. "It's a live product," he points out, opening
a stick of each type, fresh off the line, for us to try. Sampled
side by side, the cultured butter tastes intensely fresh and sweet;
the salted butter just as fresh but salty-tart.
Identity and integrity
To begin its transformation into butter, the milk must travel from
the truck tanker to the creamery's storage silos, and then from
the storage silos to the separation and pasteurization room. The
creamery has two, fully enclosed truck bays, which form an integral
stage in the sanitation protocol for milk handling. Each day, organic
milk arrives here from small dairy farms in Minnesota, Iowa, Wisconsin,
and Illinois—around five hundred farms in all. The trucks
roll in, the doors close, and the whole room and its contents are
washed down before the milk is unloaded, one truck at a time.
After the trucks leave, the room is washed down again and heated
to dry it out before the process starts over. It takes an hour and
a half to unload a truck of milk. Strict regulations govern the
sealing and unsealing of the truck tank valves in order to maintain
the cleanliness and organic integrity of the milk within.
After being separated, the cream goes to the adjacent butter room
while the skim milk ships back out to be bottled, or to be made
into powdered milk or cheese. (Cream
is also sold to a local organic ice cream maker.) They run 31,000
pounds of milk an hour through the pasteurizer, Larson explains;
some milk is shipped back out unpasteurized for raw cheese production.
Back in the butter room, the end result is a highly developed yet
classic example of identity-retained marketing: Each individual
stick of butter is identified on its label as "organic cultured
unsalted sweet cream pasteurized Wisconsin Grade AA."
The creamery is certified by Oregon Tilth. The single biggest issue
separating organic from non-organic milk handling, Larson says,
relates to sanitation materials. There's a fundamental conflict
between organic regulations, which seek to ensure that no cleaning
product residues remain in the pipelines to contaminate the milk,
and USDA dairy regulations, which consider that if you rinse the
lines after sanitizing, you're no longer sanitized. The answer?
Vinegar-based sanitizing products that evaporate rapidly and completely.
"There's a little more record keeping," Larson says of
the certification process as a whole, but not much more since all
milk handlers are subject to regular inspections by state and federal
agencies anyway. "We're very fortunate in that we're all organic
here," he notes. "It saves us a lot of time not having
to worry about organic and non-organic product getting mixed up."
Building a bigger barn
legacy of cooperation
Historically, Wisconsin has been known for its progressive
politics, strong cooperative tradition and flourishing
dairy sector. In 1887, the state passed one of the first
U.S. laws protecting cooperatives, and in 1922 that
legislation helped form the basis for the Capper-Volstead
Act, the landmark federal law establishing the rights
of producers to band together for marketing purposes.
The history of Organic Valley's butter plant illustrates
in miniature the overall trajectory of dairy production
and processing in Wisconsin: Originally founded in the
1920s as the Chaseburg Cooperative Creamery, it was
bought out by a larger company called Tri-State in the
1980s and then by Swiss Valley in 1997. According to
the University of Wisconsin Center for Cooperatives
(UWCC), in 1917 there were 835 creameries in Wisconsin,
of which 380 were farmer-owned, and 1,929 cheese factories,
of which 718 were farmer-owned. Coops received strong
government support during the Depression, and numbers
rose until about the 1950s.
In the 1960s, the number of traditional farmers' cooperatives
began to dwindle. Some folded, others merged. More recently,
however, the first of what researchers at the UWCC call
"new generation cooperatives" began to appear.
New generation coops are characterized by greater capital
investment on the part of farmer-members and greater
attention to meeting the specific demands of the market,
both in quantity and quality of product. These traits
are critical to survival in today's highly competitive
There are two dominant trends in the Wisconsin dairy
industry today, says the UWCC's Robert Cropp: While
some existing dairy coops and cheese plants have survived
by consolidating and cutting costs to compete with the
big dairies out west, others have stayed small and found
niche markets like specialty, organic and grassfed products.
"In recent years we have seen an increase in the
number of small coops, and frequently it's a group of
farmers wanting to do something to add value to their
products," Cropp observes. "Most milk in Wisconsin
is made into cheese, and 80 percent of Wisconsin cheese
is commodity cheese," meaning it's produced in
large blocks that are then sold on to another company
to be cut and packed.
Today there are 175 cheese plants in Wisconsin—again
with a slight recent increase in small-scale plants.
"[For] some of the cheese plants that Organic Valley's
using, [the coop's] business amounts to a whole day's
production in a weekly schedule," says the Center's
Greg Lawless. "So they're definitely having an
Back in La Farge, our tour guide for Organic Valley's new headquarters
is Curt Parr, manager of IT services and another local boy. A native
of the nearby town of Sand Hill (population 744), Parr attended
La Farge High School, then went off to college and worked in Chicago
for a few years before returning home and taking his present job
in 2003. His wife also works for the coop, and his family's farm—managed
today by his father, siblings and nieces and nephews—has transitioned
to organic and sells milk, meat and produce through Organic Valley.
Parr has vivid memories of growing up during the 1980s Farm Crisis
and watching neighboring farms go under one by one. His father accepted
the federal Dairy Buyout of 1985, then returned to dairying in 1991.
In 1997, his dad "got on the truck" with Organic Valley.
"One of the things Organic Valley really emphasizes is diversity
on the farm," Parr explains, adding that it was in response
to that encouragement that his family's farm diversified into beef
and vegetables. The promise of organic markets in general, and Organic
Valley as a way of reaching those markets, means that "now
there's an opportunity to be successful in farming again,"
The new headquarters building sits on a 34-acre site at the top
of a rise above the town of La Farge. Before relocating here in
August 2004, the co-op's offices were spread across seven La Farge
locations. Needless to say, the IT staff's jobs have been vastly
improved by the move. "The goal was to get everyone from seven
buildings into one building and use 25 percent of the energy,"
The building itself is essentially a long metal pole barn—it
was, in fact, constructed by Morton Buildings, Inc., of Dodgeville,
Wis.—with half of a post-and-beam barn tacked on to the middle
of one side and an uncommon amount of thought put into the interior.
The timber-frame transept forms a two-storied, sun-filled main entrance;
the kitchens, restrooms, and stairwells are concentrated in the
crossing; workstations, offices, and conference rooms spread to
each end of the main barn.
The headquarters was designed to be not just a model of energy
efficiency but also an exercise in "building local." The
structure joins just three others in Wisconsin to meet LEED standards
(Leadership in Energy and Environmental Design) for energy conservation
and environmental impact, and all materials were sourced within
a 500-mile radius of La Farge. All of the timber, including the
window frames, was obtained locally. The building is oriented to
optimize natural light and heat; most of the grounds are seeded
to prairie grasses and forbs. Even the workspace dividers were obtained
second-hand from another company.
The new headquarters currently houses around 180 employees; maximum
capacity in its current configuration is 225. The cooperative expected
to have space to grow here until 2008, Parr says, but it's already
apparent that the building will fill up well before then. "We're
really good at dealing with change," says our guide cheerfully,
showing us a training room filled with computer workstations. "We
hired new 73 people last year. Training is one of the most important
things we do."
Organic Valley's former headquarters (still known as the 'Main
Building,' because it sits on Main Street) is now home to a small
retail shop for Organic Valley food products, some remaining office
space, and a cheese cutting and packing facility. The coop's cheeses
are custom-made by a number of different processors in the region,
but they all come back here to be graded and packed. Like the rest
of Organic Valley's business, cheese sales have grown steadily:
The cutting and packing facility currently handles 150,000 pounds
of cheese a month, running two shifts a day; and there's talk of
rounding out the schedule with a third. "We could contract
out some of the packing and labeling," says one facility employee,
"but then we wouldn't have our arms around it."
Such are the ingredients in CROPP's recipe for success. By hiring
locally, encouraging farmer-members to diversify, renovating a small-town
creamery for butter production and relying on the state's strong
dairy-processing sector for their cheeses, the organic coop has
managed to draw on its native territory's strengths in order to
stay competitive in an increasingly challenging marketplace. All
in all, you could say they fit right in.
Laura Sayre is senior writer for NewFarm.org.