Web note: For infomation on the serious health hazards of rBGH (Brand name: Posilac), see http://www.organicconsumers.org/rbghlink.html

A new category of milk soon will join the old favorites on local store shelves, much to the chagrin of Monsanto Co.

Dairies and producers in the St. Louis region are preparing to meet retailers' demand for milk made without the use of Posilac, a synthetic bovine growth hormone sold by Creve Coeur-based Monsanto to boost a cow's production.

They predict that milk labeled or marketed as free of the hormone — and sold at a premium price — will reach local stores by next summer. It is the extension of a trend begun in California and the Northeast, and part of an overall drive by consumers toward food perceived to be natural or more healthy.

Retailers are eager to expand their organic milk offerings, which fetch a high price, said Scott Brown, a dairy expert with the University of Missouri's Food and Agricultural Policy Research Institute. But there is a lag in supply because it takes dairies three to five years to implement changes and achieve organic certification by the U.S. Department of Agriculture.

So, some retailers are turning to Posilac-free milk as "organic light," creating a category that is priced above traditional milk and gives consumers the sense their demand for a more-natural supply is being met, said Monica Coleman, spokeswoman for Dairy Farmers of America Inc. of Kansas City, one of the nation's largest milk cooperatives.

The movement comes despite the opinion of agriculture experts, including those at the U.S. Food and Drug Administration, that milk is the same, regardless of whether the cows that produced it received Posilac. There is no test that can detect a difference.

Dennis Wolff, Pennsylvania's secretary of agriculture, wrote in a Pennsylvania Farm News column on Wednesday that the distinction being drawn is a marketing ploy, which comes at the expense of producers who are being asked to give up a tool that can boost their bottom lines.

"These marketing techniques are guiding consumers to purchase this milk, and allowing processors and retailers to charge more per gallon than for unlabeled milk," he wrote. "However, in this situation, consumers are not basing their decisions on sound science, but rather on manipulative marketing."

Nevertheless, the technique is working — and spreading at a rapid pace.

"We believe the trend will continue from both sides of the country and converge on the Midwest sometime in the next year. And so we have begun advising our producers that this is looming Â… and they need to start thinking about it," said Gary Lee, vice president of procurement for Prairie Farms Dairy Inc. of Carlinville, Ill.

The Prairie Farms cooperative of dairy producers has about 800 members, roughly half in Illinois and the remainder in Missouri, Iowa, Michigan, Indiana and Ohio. A decision to switch to a Posilac-free milk supply will be all or nothing, because it is costly and complicated to segregate two streams, Lee said. And the dairy is under considerable pressure from retailers — including two major, household-name accounts he would not identify — to make the change.

Monsanto's stake

Monsanto is the sole producer of recombinant bovine somatotropin, or rBST, which it began selling under the Posilac name in 1994. The company does not disclose revenue from the product, but it is part of the $7.3 billion biotech crop giant's animal agriculture unit, which reported $1.1 billion in fiscal 2006 sales. Posilac sales were constrained from 2003 until this year by a quality-control problem at a European supplier — a problem that prompted Monsanto to invest in its own plant in Augusta, Ga., that opened in March.

Some financial analysts estimate Posilac is worth about $250 million a year to Monsanto.

The move toward Posilac-free milk is a concern for Monsanto, said Kevin Holloway, president of the company's dairy business.

"We are focused on this. We can't afford not to be," he said. "Anything that inhibits the opportunity to (increase sales) at the targets I would feel comfortable with is on my radar screen."

Yet in fighting the trend, the company is not aiming at consumers.

Monsanto spokesman Andrew Burchett cites a survey funded in part by the International Dairy Foods Association, a trade group, that says only 30 percent of consumers are aware of any issue regarding hormones and milk; and 70 percent of those who are aware say they are not concerned.

"It is clear that certain processors and retailers are driving this to gain market share and pricing power for their brands. Many farm and consumer families will pay for this and there will be no difference in the milk," he said.

So, Monsanto is appealing to producers, dairies and key retailers, Holloway said. The company recently sent to producers a 12-page brochure and unveiled a website, www.make10.net, both aimed at showing them how giving up the use of Posilac can cut production and profits.

"This challenge around an FDA-approved technology has caused us to be more focused and create better educational tools, to engage those in the industry for more support," Holloway said.

Dairy farm dilemma

But some producers say they are interested in anything that can bring more money to their mailbox.

The price producers receive for fluid milk, which is set by the federal government, is hovering around $12 for 100 pounds — so low that many dairy farms are shutting down and others are bare­ly making a living, said Dave Drennan, executive director of the Missouri Dairy Association. Missouri, for example, had 1,837 permitted dairy farms in December, down from 3,499 at the end of 1994, according to the Missouri State Milk Board.

If a dairy is willing to pay a premium to farmers who pledge not to use Posilac, many are willing to take it — especially because only about one-third of them are using the synthetic hormone.

Using Posilac can boost milk production by 10 to 15 percent "and that means a lot when milk prices are high. But right now, milk is very cheap. There's not much profit in it," said James Wesselschmidt, who owns a 180-head dairy in New Haven. He is on the board of several dairy groups, including the Midwest Dairy Association, St. Louis District Dairy Council and Dairy Farms of America.

"Producers can make more by getting a premium from bottlers for (non-Posilac) milk than from boosting overall production using it," he said.

Kristen Burkemper, who runs an 80-head dairy farm with her husband, Roger, in Old Monroe, does not use Posilac. But she says every farmer ought to have the option, rather than having it taken away by market forces.

"You work so hard to farm Â… whatever works for your bottom line, do it. Whatever technology you can utilize, I say it's terrific," she said.

The use of Posilac "is an individual decision for each dairy farmer and for each consumer — but you've got to pay attention to what's driving the consumer right now because the price is just too low not to, whether it's right or not," she said. "I want to take Monsanto's side, but then if I'm offered more money not to do it, then I'm going to take it."

Going organic

A growing number of dairy producers are going a step further, beginning the process of becoming certified as an organic farm. They want a piece of that most lucrative dairy category, for which a small but influential and affluent group of consumers is willing to pay three or even four times as much per gallon as "regular" milk.

Some of that premium flows to producers. In the case of Posilac-free milk, which typically retails at less than a dollar more than traditional varieties, producers also are seeking financial incentives from dairies for supplying it.

Dairies so far have shown a willingness to pay more for Posilac-free milk. But there is no guarantee that trend will persist, Brown said. He predicts that as more organic milk supply comes on line, prices in both categories will drop. That could leave producers of Posilac-free milk in double trouble: lower prices and lower production.

"And there is some reason to be concerned about starting a long-term trend of people thinking, 'Gosh, that milk I've been drinking all along is bad for me.' Does that get them to not drinking milk at all? Â… The jury's out," Brown said.

As for Monsanto, Holloway said he expects Posilac sales to grow. New customers have come on board since the company's Georgia production plant opened and sales targets are being met. He would not quantify them, but said, "our goals are very aggressive Â… that's the expectation of the company."

Brown noted that more than 60 percent of milk produced in the United States is used in the production of cheese, yogurt and other manufactured products. And consumers and retailers seem less concerned with Posilac use beyond fluid milk, he said.

"Having an organic or (Posilac-free) label won't be important if it goes in the mozzarella cheese that goes into a Pizza Hut pizza," Brown said. "I don't think that, overnight, Monsanto's going to find that the market for Posilac is gone. But it's something they need to keep a watchful eye on, to see if it's a long-term trend."

What milk labels mean

"Organic": Cows receive organic (not genetically modified or pesticide-treated) feed, have access to pasture and do not receive antibiotics or growth hormones. Organic dairies are certified by the U.S. Department of Agriculture following a typical transition period of three to five years.

"Produced without the use of growth hormones": Producers pledge not to use recombinant bovine somatotropin, or rBST, a synthetic version of a hormone that naturally occurs in lactating cows. Monsanto Co. is the sole maker of rBST, which it sells as Posilac.

Unlabeled, or "regular" milk: Animals may or may not receive Posilac, based on decisions made by individual producers. There is no test that can detect a difference in milk coming from Posilac-treated or untreated cows.