Investigation: “Factory Farms” Producing Massive Quantities of Organic Milk and Eggs

December 11th, 2014

Regulations Not Being Enforced—Watchdog Asks for USDA to Remove Program Management

In what has been called one of the largest fraud investigations in the history of the organic industry, The Cornucopia Institute, a Wisconsin-based farm policy research group, announced filing formal legal complaints against 14 industrial livestock operations producing milk, meat and eggs being marketed, allegedly illegally, as organic.

Aurora Dairy, Stratford, Texas  18,000-head, gaming the system.

After years of inaction by the USDA, Cornucopia contracted for aerial photography in nine states, from West Texas to New York and Maryland, over the past eight months. What they found confirmed earlier site visits: a systemic pattern of corporate agribusiness interests operating industrial-scale confinement livestock facilities providing no legitimate grazing, or even access to the outdoors, as required by federal organic regulations.

A photo gallery of the apparent abuses by the giant certified organic operations in question can be found at http://www.cornucopia.org/organic-factory-farm-investigation.

“The federal organic regulations make it very clear that all organic livestock must have access to the outdoors and that ruminants, like dairy cows, must have access to pasture,” said Mark A. Kastel, Senior Farm Policy Analyst at the Wisconsin-based Cornucopia Institute. “The vast majority of these massive, industrial-scale facilities, some managing 10,000-20,000 head of cattle, and upwards of 1 million laying hens, had 100% of their animals confined in giant buildings or feedlots.”

The family-scale farmers who helped commercialize the organic food movement starting in the 1980s did so, in part, because agribusiness consolidation and control of the food supply was squeezing profit margins and forcing farmers off the land. Consumers enthusiastically made organics a rapidly growing market sector by supporting farmers and processors that were willing to produce food to a different standard in terms of environmental stewardship, humane animal husbandry, and economic fairness for farmers.

“Shoppers, who passionately support the ideals and values represented by the organic label, understandably feel betrayed when they see photos of these massive CAFOs (concentrated animal feeding operations) masquerading as organic,” Kastel added.

The organization recommends consumers consult Cornucopia’s organic brand scorecards so they can choose from the many organic brands that partner with farmers and that truly deliver on the promise of better environmental stewardship, humane animal husbandry, and economic justice for the families who produce organic food.

“Many of our dairy farmer-members have animals they truly care for that have names, not numbers,” Kastel added.

Delta Egg in Chase, Kansas,  100,000-hens per building, none outdoors.

Cornucopia filed their first legal complaints against these industrial operations, with varying degrees of success, beginning in 2004. As a result, the largest dairy supplying the Horizon label (now controlled by WhiteWave Foods) was decertified, and the USDA placed sanctions against Aurora Dairy (producing private-label organic milk for Walmart,Costco, Target and various supermarket chains). Both WhiteWave and Aurora are still being investigated by the USDA for improprieties.

But the wheels of justice, according to Cornucopia, are now turning slowly or not at all. One example is Arizona-based Shamrock, which operates a vertically-integrated dairy in the desert outside of Phoenix that jointly manages over 16,000 organic and conventional cows. The USDA eventually confirmed the basis of a complaint filed in 2008 by the nonprofit public interest group, finding the dairy operating illegally — but not until 2011, three years after the complaint was filed. Now, more than six years later, Shamrock still has a pending appeal and is still selling milk in the Southwest undercutting ethical farmers and competitors that comply with federal organic law.

“The inaction by the USDA places thousands of ethical family-scale farmers, who are competing with a couple of dozen giant dairies, at a competitive disadvantage,” said Kevin Engelbert, a New York-based dairyman, milking 140 cows who, along with his family, was the first certified organic dairy producer in the U.S.

The Cornucopia Institute website maintains research-based scorecards rating all organic eggs, dairy products, soy foods, and several other food categories for their adherence to organic ideals, with the stated goal of “empowering consumers and wholesale buyers in the marketplace — accessing authentic food and rewarding the true heroes in the industry.”

Engelbert, who also previously served on the USDA’s National Organic Standards Board (NOSB), stated, “When serving on the NOSB, I was always reminded that the recommendations we made to the National Organic Program (NOP) had to be scale-neutral. I would like to see the Organic Food Production Act enforced on a scale-neutral basis as well.”

With enforcement of neither the letter of the law nor the intent, many traditional organic dairy farmers are in financial stress right now, with some selling their cows and exiting the industry. “Allowing these illegal dairies to continue to operate is a travesty and significantly undercuts the supply-demand dynamic that should be rewarding farmers in the marketplace and providing a decent living for our families,” Engelbert added.

Although Cornucopia was critical of the USDA’s operation of the National Organic Program (NOP) during the Bush administration, it says it finds the current conduct of the Obama administration even more “insidious.” Engelbert, Cornucopia’s board vice president, continued, “The so-called ‘Age of Enforcement’ the organic community was promised, when the new administration took over in 2009, has been anything but with regard to large-scale ‘organic’ operations breaking the law.”

During the Bush years the USDA was charged as being hostile to organic interests delaying the implementation of the law and then being recalcitrant in carrying out the will of Congress by enforcing the standards.

“Since President Obama was elected they’ve greatly expanded the budget of the NOP, added competent staff, and said all the right things,” lamented Kastel. “These people know better, but they have sided with the powerful industry lobby, the Organic Trade Association, and institutionalized corruption that started before their administration took office.”

In the chicken industry the USDA has allowed corporate agribusiness to confine as many as 100,000 laying hens in a building, sometimes exceeding 1 million birds on a “farm,” and substituting a tiny screened porch for true access to the outdoors.

Herbruck’s in Saranac, Michigan,  85,000-hens per building and none outdoors.

The loophole, “porched-poultry,” was first allowed in 2002 when the NOP director overruled organic certifiers and allowed The Country Hen, a Massachusetts egg producer, to confine tens of thousands of birds in a barn with an attached porch that might, at best, hold 5% of the birds in the main building.

The USDA staff person running the organic program at the time later waltzed through what is commonly referred to as “the revolving door,” between regulators and the industry, and went to work as a consultant for The Country Hen lobbying against outdoor access standards for poultry.

“Quite frankly, even if Miles McEvoy, who currently directs the NOP, believes that a porch, with a floor, ceiling and screened walls, constitutes ‘the outdoors,’ if only 5% of the birds have access or can fit in that space, then 95% of the others are being illegally confined,” Cornucopia’s Kastel stated.

McEvoy and the USDA’s National Organic Program have been a lightning rod for criticism, not just on their alleged inaction against illegal livestock operators but for recently changing the oversight responsibilities of the NOSB, a citizen advisory panel, and undermining powers bestowed upon it by Congress that severely restrict the use of synthetic and non-organic inputs and ingredients in the production of organic food.

In late 2013, McEvoy broke with 20 years of precedent and, unilaterally, stripped the NOSB of the ability to create their own work plans and set their agenda for addressing concerns in the organic industry. The USDA also fundamentally weakened the “sunset” procedures that require the review of synthetic and other non-organic ingredients in organic foods every five years.

“The current situation, applauded by the industry’s most financially powerful interests, and almost universally condemned by nonprofits representing farmers and consumers, is untenable,” said Jay Feldman, Executive Director of Beyond Pesticides and a current Obama administration appointee to the 15-member NOSB. “Someone needs to take responsibility for the divide in this industry which has begun seriously undercutting the credibility of the organic label and the livelihoods of ethical organic farmers.”

Some industry observers contend that even more important than organic farms and marketers adhering to the letter of the law, is meeting the expectations of consumers who are willing to pay a premium for food produced to a higher standard. Significantly, Consumers Union, publisher of Consumer Reportsmagazine, recently downgraded the value of the organic seal from its highest rating due to their concerns about recent attempts by the USDA to undermine the power and independence of the NOSB.

“It is hard for us to discern whether the current policy failures start or end with Mr. McEvoy,” said Kastel. “But it’s time for someone to take responsibility and, sadly, we think an individual who is widely respected, and viewed as neutral at this point, needs to be brought in to clean up this mess.”

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The factory farms that Cornucopia has filed complaints and a link to the actual complaints include:

• Aurora Coldwater
• Aurora Dublin
• Burns Poultry (Herbruck’s)
• Bushman Farms (Organic Valley)
• Delta Egg Farm
• Green Meadow (Herbruck’s)
• Hilltop LLC – Boehning Dairy
• Horizon Dairy (WhiteWave)
• Idalou Egg Ranch
• Kreher’s
• Natural Prairie
• Raymond Facility
• Redland Dairy
• Smart Chicken

A photo gallery of the apparent abuses by the giant certified organic operations in question can be found at http://www.cornucopia.org/organic-factory-farm-investigation.

There is nothing in the federal organic standards pertaining to the size of any given operation.

“The organic standards are scale-neutral,” said Kastel. “However, if properly enforced the standards are scale-limiting. At some point the magnitude of these operations becomes preposterous — because their practical ability to meet minimum organic and humane livestock standards becomes impossible.”

Just like the debate over the farm bill, where limiting payments to large-scale operations has never gained traction with either political party, the problems in the organic industry appear to be bipartisan in nature.

“Follow the money,” said Kastel. “Although the food industry pretty much ignored organics when Congress passed the enabling legislation, as part of the 1990 farm bill, now that giant corporations like General Mills, Smucker’s, Kellogg, and WhiteWave have massive investments in organic pioneering brands, their lobbyists are all over the USDA making sure that the decisions that come out of the agency favor their preferred industrial model of food production.”

The prominent infographic, Who Owns Organics, can be accessed on the Cornucopia website: http://www.cornucopia.org/who-owns-organic/.

Peer-reviewed published research indicates clear nutritional advantages in consuming milk and meat from cattle that are grazed on fresh grass, including elevated levels of omega-3 fatty acids.

Eggs and chickens from birds that are allowed, as the law requires, to engage in their instinctive behaviors as omnivores in foraging on grass and insects, produce eggs that are coveted as being more nutritious and more flavorful.

“We keep expanding our flock but still can’t keep up with demand,” said Cameron Molberg, a certified organic egg producer who rotates 19,000 birds on pasture near Austin, Texas. “We are proving that this model can be highly successful in the marketplace.” Just as the Bush administration was accused of dragging out enforcement against mega-dairies, many of which were later found to be scofflaws in terms of not grazing their animals, and instead pushing them for high production in confinement, the Obama administration has allowed factory farms producing organic eggs to flourish during its tenure.

“The department’s claim that it needs more detailed regulations, specifying minimum amount of space outdoors, before they can enforce the law, is a specious argument,” Cornucopia’s Kastel affirmed. “If it was a question of whether or not these outfits were affording enough outdoor space to their birds, that would be one thing, but these are confinement operations with no, I mean zero, animals outside. They are flagrantly breaking the law!”

In addition to the published regulations, USDA Deputy Administrator Miles McEvoy issued a Policy Memorandum, on January 31, 2011, clearly stating, in terms of access to “outdoors,” that producers must provide livestock with “an opportunity to exit any barn or other enclosed structure.” Cornucopia contends that this memo clearly suggests that enclosed porches (“structures”) do not meet the legal requirements for access to the outdoors but the USDA has been unwilling to enforce their clear interpretive statement.

Cornucopia contends that consumers, who rightly assume that the animals producing their food are being treated respectfully, and consequently resulting in higher quality food, are being taken advantage of in the marketplace.

The widely respected and nationally prominent organic dairyman, Kevin Engelbert, chimed in when addressing the controversy regarding chicken production with, “If you think a porch represents true access to the outdoors, when your children or grandchildren ask to play outside allow them to do so, but note their response when you say they have to stay on the porch.”

In the case of the Horizon dairy in Paul, Idaho (WhiteWave), instead of the USDA sending its own agents to investigate complaints against the operation, the USDA sent in the same certifier that initially approved the operation to investigate alleged improprieties.

“This is just unconscionable,” said Kastel. “In this instance, the certifier, Quality Assurance International, has been implicated in a number of other improprieties. Our thorough investigation and legal complaint indicated this dairy, with no pasture, never should have been certified in the first place. The job of the USDA is to oversee the certifiers and ensure that they are doing their job. It is quite possible that, in this case, there could have been a conspiracy and/or negligence that the certifier was responsible for.”

“Although the organic oversight system can, to say the least, be improved, there are few alternatives in the commercial food stream if consumers, especially parents, want to avoid agrochemical and drug residues in their food and provide superior nutrition for their families,” said Kastel. “That’s where it becomes imperative that farmers and their customers work together to maintain the integrity of the organic label. In the meantime, Cornucopia’s scorecards provide guidance enabling shoppers to reward the true heroes in this industry.”