This Economy: Is new rule a boon for Pa. organic milk sales?

Five years ago, sales of organic milk were booming, but the industry was embroiled in controversy over big dairy operations in Western states that were flouting the spirit of federal organic rules by giving cows only limited access to pasture.

Now, with growth in sales of organic dairy products soft for the first time since the U.S. Department of Agriculture's organic-food rules took effect in 2000, a new rule effective Thursday sets tough standards for how much of its food a dairy cow should get from grass during grazing season.

This rule, which gives farmers a year to come into compliance, should be to the advantage of small organic-dairy farms in Pennsylvania and the other big Northeastern dairy states, New York and Vermont.

"We do have some real advantages over the Wild West, not the least of which is good grass-growing weather, but also close markets and smaller family farms," said Roman Stoltzfoos, who milks 200 cows on a Lancaster County farm near Gap.

Stoltzfoos, who sells his milk to Natural By Nature in West Grove, said his cows already got 50 percent to 60 percent of their food from grass during grazing season, putting him well over the minimum of 30 percent required by the new rule. The grazing season must be at least four months long. Many cows in Pennsylvania graze for six months.

Many small farmers have taken to grazing their cows because, done right, it can be more profitable than raising crops to feed cows, or buying feed.

But not all of Lancaster County's estimated 100 organic dairies are going to have it as easy. Most farms there are small. It is not uncommon to have intensely farmed 60-acre dairies side by side with 40 cows each, said Peter Miller, eastern regional manager for milk producer Organic Valley, of LaFarge, Wis.

"They are literally fencing off cropland" to plant more pasture, Miller said. "There probably will be some casualties."

The new rule replaces a vaguely stated requirement that cows have "access to pasture." The National Organic Standards Board, which advises the Agriculture Department, has pushed for more stringent requirements ever since federal organic regulations took effect in 2000.

U.S. sales of organic dairy products exploded from $725 million in 2000 to $3.61 billion in 2008, before falling 1 percent, to $3.57 billion, last year, the Organic Trade Association reported.

Much of that growth came from massive dairies in California, Oregon, Texas, and Colorado. Texas had nine organic dairies that in 2008 produced nearly twice the sales of the 225 organic dairies in Pennsylvania.

Are the huge dairies going to be able to comply with the new rules? After all, cows can only walk so far between the milking parlor and the pasture.

Sonja Tuitele, vice president of communications for Aurora Organic Dairy, which has 13,920 cows on four farms with 4,420 acres of pasture in Texas and Colorado, said the privately held supplier of private-label organic milk expected no operational changes. "What we're doing now in terms of irrigation is going to be sufficient," she said.

Small Northeastern farmers tend to harbor suspicions about their large Western competitors, but George Siemon, chief executive officer of Organic Valley, said grass-based operations can be big. "I've seen farms up to 3,000 cows that could pass the standard in a good way," he said. "It's all in the layout of the farm."

Ned MacArthur, owner of Natural Dairy Products Corp. in Chester County, which sells under the Natural By Nature brand, has long been particular about making sure his milk comes from grass-fed cows.

He said he was happy about the new rule: "It gives the consumer some assurance. I think organic milk was getting a black eye because of the big Western dairies that weren't really grazing."