Growers and Grocers

The principal of supply and demand regulates a lot in the business world from prices to availability of goods. A recent decision by Wal-Mart to carry organic milk under its store brand label at a discounted price is likely to drive organic milk costs down across the board, experts say.

The New York Times reported Saturday that half-gallon containers of the milk have already made their way onto the shelves of 1,200 of the company’s stores.

Harvey Hartman, president of the Hartman Group, a market research firm working with Wal-Mart on its organic initiatives, said Wal-Mart’s own brand of organic milk will mean a lot more will be sold in the United States. “They’re creating incremental users because they’re removing one of the big inhibitors to buying organic, which is price,” he said.

Last year, organic milk sales increased by 25 percent from the year before and Mr. Hartman predicts that Wal-Mart’s brand could lift annual growth to as much as 35 percent. Currently, organic dairy represents 3.5 percent of all dairy products sold in the United States, according to the Organic Trade Association.

The organic milk is produced by Aurora Organic Dairy, a large scale organic dairy farm that supplies several chain retailers. They operate one of the largest dairy operations in the country, according to the Times. But not everyone is pleased with these developments, which will help bring more organics to an obtainable level for the masses.

The controversy turns on how closely Aurora adheres to the principles behind the organic food movement. Many organic farmers say grass feeding is essential for organic dairy production because it is part of a cow’s natural behavior. Milk from grass-fed cows, they say, is also higher in beneficial fatty acids than milk from cows fed grain, making it more nutritious.

At Aurora’s Platteville operation, about 40 miles north of downtown Denver, 4,000 cows are put on grass only when not being milked or when they are nearing the end of a lactation cycle. That totals about two to three months a year. The rest of the time they stay in dirt-lined outdoor pens where they eat from an ample trough filled with a mixture of hay, silage, corn and soybeans.

Clark F. Driftmier, head of marketing at Aurora, said the company planned to reduce the number of cows in Platteville to 1,000 by next summer so all the animals could graze. In addition, he said, the number of acres of pasture at the Texas farm will triple by next spring.