Organic Valley brings co-op to commodities

In an effort to stabilize feed prices for its organic milk and egg suppliers, Organic Valley reached out to grain growers and invited them to join the cooperative’s ranks.

Organic Valley’s current membership represent a large piece of the market for organic grain growers, says Lowell Rheinheimer, farm resources manager for La Farge-based Organic Valley. “We went to them and asked: How can we create a system that works for all parties?”

The growers suggested an organization that included both buyers and sellers, Rheinheimer says. “Our cooperative grower pool is creating an environment where buyers and sellers can actually talk to each other and reach an agreement on what’s fair,” he explains.
Greg Engles, chairman and CEO of Horizon Organics parent company Dean Foods (NYSE: DF), told analysts in February that the cost of organic grain had risen from $200 per ton to $500 per ton by the end of 2007.

U.S. and Canadian growers are offered a three-year fixed price floor for as many acres as they choose and are free to “play the market” as well. Any grain crops not used by co-op members will be sold by Organic Valley.