The two largest providers of organic milk in the U.S., Organic Valley and Horizon Organics, are embroiledin a lawsuit over what Horizon alleges was a breach of contract and the misappropriation of confidential information and trade secrets, according to the Wisconsin-based farm policy research group, The Cornucopia Institute.
Horizon, which is owned by the $13-billion dairy giant Dean Foods, says Larry Hansen, an employee responsible for dairy procurement, quit his position with Horizon in May of this year. Fewer than two weeks later, he was working a similar position at the CROPP cooperative that owns the Organic Valley brand.
The lawsuit claims that Hansen, who was pressed for information about his new employment upon leaving Horizon, never told his former employers about his plans to move to Organic Valley. He’s accused of reaching out to his farmer contacts made at Horizon with his new contact information at Organic Valley. And the lawsuit accuses CROPP/Organic Valley of “actively participating” in the misconduct.
“Quite a few farms shipping milk for their Horizon label, over the last couple of years, have jumped ship and joined the CROPP Co-op [Organic Valley],” said Mark A. Kastel, Senior Farm Policy Analyst at the Wisconsin-based Cornucopia Institute.
The Cornucopia Institute reports that legal filings allege Hansen was responsible for managing relations with nearly 50 farms, making up more than 35 percent of the milk produced for Horizon Organics. “Just 48 farms, supplying a whopping 35% of the milk supply for their Horizon label, is certainly emblematic of Dean Foods’ reliance on supersized dairies for their organic milk supply,” Kastel said.
CROPP, which is much more familiar to consumers as Organic Valley, is owned by more than 1,700, predominantly, family-scale farmers across the U.S., with significantly smaller herd sizes than “big” organics, like Dean’s Horizon. And generally, they “treated their suppliers better during the period of oversupply,” Kastel added.
Although Dean Foods purchases milk from family farmers as well, they built their commanding market share with suppliers milking as many as 10,000 cows in feedlot environments.
The legal tangle between Horizon and Organic Valley brings more attention to the issue of “big” organics. The Cornucopia Institute was recently featured in a New York Times article (“Has ‘Organic’ Been Oversized?”) on the subject. The story highlighted their recently released report, The Organic Watergate. Dean Foods and their Horizon brand has been accused of using unethical tactics with their farmers, even forcing some out of business for good.
Keep in touch with Jill on Twitter @jillettinger
Image: dcysurfer / Dave Young