"We've tried very hard to be the voice of reason between the purist radicals and the big corporate farmers," says Organic Valley's CEO, George Siemon. Click "Gallery" for graphs charting Organic Valley's growth.

 North of Sun Prairie not far from Highway 151, on 1,600 acres of silt loam soil, sits R & G Miller & Sons, one of the state's largest organic dairy farms and Exhibit A in a remarkable agriculture success story.

The Miller farm, with its rotational fields for corn, oats, soybeans and pasture, supports a 320-cow dairy herd of mostly Holsteins. The eight members of the extended Miller clan who own the farm belong to the hugely successful co-operative that sells the Organic Valley line of products.

Organic Valley's sales topped $330 million in 2006, and its 1,183 farmer-owners – 409 in Wisconsin; the rest scattered in 32 other states and Ontario – are prospering.

For cousins Jim and Tom Miller, the switch to organic farming has been a life-changing development. Sitting in a small, unassuming office at the front of their barn, the two Millers explain how the fear of pesticide and herbicide exposure turned them to organic farming in the mid-1990s.

"My father died of colon cancer, and that prompted us to look at another way of farming," says Jim. "He did all the spraying, all the fertilizing."

Reinold Miller – the "R" in R&G Miller – was 69 when he died in January 1994.

"For me and my brothers, when we looked at Dad's friends who did the spraying, they all got Parkinson's disease, diabetes or they're dead," says Jim. "They all died prematurely."

"My brother Ron was next in line," adds Tom. "He did the spraying for a couple of years, but basically he liked the idea of not handling it. We all wanted to get away from it."

The Millers can't prove their suspicions about Reinold's death. But like millions of Americans, they turned their back on the chemicalization of food production.

That's meant embracing an entirely different approach to raising their cattle and tending their crops. By 1997, R & G Miller & Sons was shipping organic milk to the oddly named Co-operative Regions of Organic Producer Pools, or CROPP, headquartered in tiny La Farge in southwestern Wisconsin. CROPP markets its goods under the Organic Valley Family of Farms label.

For Jim, 58, and Tom, 50, joining CROPP proved to be a financial masterstroke, one that cemented their return to a family homestead that dates to 1852. Jim spent 25 years in the restaurant business and Tom worked for 15 years as a mechanic and welder before they came back to the family farm.

Now they were farmers with a future – the perfect illustration of how potent and far-reaching the organic food revolution has become. No longer an esoteric movement concerned with food purity and farming techniques, organics have evolved into a major industry, mainstream consumer product and godsend for small farmers.

This success, though, has greatly intensified competition.

Going mainstream

Organic food sales hit $16.9 billion in 2006, according to the Organic Trade Association. That is a tiny 3% of total American grocery expenditures. But it represents a 22% annual jump in organic sales, from $13.8 billion in 2005. Rapid growth is the hallmark of organic foods.

While the overall grocery business has been puttering along with annual growth hikes of 2% or 3%, the organic segment has been growing by 20% or more a year since 1990.

In 2006, Organic Valley's sales jumped 38%; they are expected to hit $430 million this year and to pass a half-billion dollars in 2008. Not bad for a co-op that was formed in 1988 by a tiny group of struggling small farmers and back-to-the earth idealists in the picturesque Coulee Region of Wisconsin.

"Organic was a tiny niche market at first, and the big corporations could dismiss it," says Phil Howard, a rural sociologist at Michigan State University and a close chronicler of the organic industry. "But when it continued to grow, the big corporations looked at the bottom line and took notice.

"The retailing for organic has become more and more mainstream," he says. "It used to be sold in natural food stores, in co-ops. Now you can buy organic products at McDonald's."

Organic Valley helped lead the way. Its product line – a staggering 500-plus items, with dairy by far the sales leader – can be found in big-box supermarkets like Woodman's and Copps. Gaining Publix as a customer put Organic Valley products on the shelves of its almost 900 supermarkets in the southeastern United States.

Meanwhile, as Howard has documented, the giant food processors and soft-drink titans have bought up many of the nation's best-known natural foods and organic labels.

General Mills owns Cascadian Farm and Muir Glen. Kellogg owns Kashi. Pepsi bought Naked Juice. Coca-Cola bought Odwalla. Dean owns Silk soy and Horizon milk. Kraft owns Boca Foods. M&M Mars has Seeds of Change. Heinz owns Hain Celestial. The list goes on.

But "organic" is more than a business strategy or grocery product category. It's a way of looking at the world and a guidepost to making routine daily decisions.

For consumers, buying organic can mean spending their money on companies and farmers market vendors who share their values. For farmers, organic provides an alternative to the modern, high-cost mode of agriculture that stresses the seeming efficiencies of size and technology.

Organic, as CROPP has framed it, takes the big view, focusing not just on farming techniques and fair pricing but the larger values of sustainability and regional food systems.

Indeed, what's most striking about Organic Valley is how profoundly mission-driven and farmer-oriented it remains after almost 20 years of operation.

"We've stayed true to our mission," says Organic Valley's charismatic CEO, George Siemon, whose ponytail is a throwback to the co-op's hippie-ish early days.

The home team

Organic Valley's headquarters sits on a hill on the outskirts of La Farge, population 786, in bucolic Vernon County. From a distance the three-story building looks like a suburban campus of a high-tech firm you might find in Dane County, though the red-barn, gambrel-roofed entrance is a tip-off that something else is afoot.

The sprawling parking lot for the 300-plus employees contains an utterly humdrum collection of cars and trucks. No Beemers, no Hummers, no Sequoias. No ostentatious displays of financial riches. This could be the parking lot at ShopKo – except that the best stalls are reserved for energy-efficient cars.

Inside comes another surprise: Organic Valley's top management isn't button-down corporate. Not in dress, not in experience, not in philosophy. The home team still runs this national powerhouse.

Louise Hemstead, the chief operating officer, is dressed in jean pedal pushers and sandals, as she explains how Organic Valley's new $17.5 million distribution center in nearby Cashton vastly extends the company's national reach.

Hemstead, 46, is typical of the unusual management team. The daughter of Trayton Lathrop, a prominent Madison attorney, she was bit by the farm bug when her dad bought a hobby farm in Iowa County where the family would spend weekends.

"My closest friend was down the road, not at Madison West," she recalls.

She studied agriculture at UW-Madison, where she met her future husband, David Hemstead, who eventually went home to the Coulee Region to be a fourth-generation farmer. Today their small spread has 25 milking cows and 15 heifers.

Siemon is another farmer-owner of the CROPP cooperative. One of seven founding co-op members in 1988, Siemon still raises chickens, cattle, grain and vegetables with a partner on a picturesque 90-acre farm.

Born in Florida to a business family, Siemon, 54, earned a degree in animal science from Colorado State University before settling in southwestern Wisconsin in 1977. Widely credited with putting Organic Valley on the national map, Siemon seems equal parts big-picture philosopher and strategy-minded tactician.

"Organic isn't just about food," he reminded a meeting of co-op members and investors last summer. "It's about a way of thinking and has deep roots all the way back to the Greeks…. 'Organic' simply means everything fitting together to make a whole."

Mike Bedessem, the company's chief financial officer, is another pea in this unusual leadership pod. He was a former insurance executive turned organic apple grower in Gays Mills.

"I used to sell apple cider to the Willy Street co-op," he says with a laugh. "In fact, I was delivering apple cider to Willy Street when I threw out my back in 1991." He went to work for CROPP in 1992: "I realized I was a better accountant than farmer."

Bedessem, 50, knows there's something special about working at Organic Valley. "I swear that when George selected us it was because he felt that we weren't driven by our egos, that we wouldn't be driven by money. That, instead, we would be driven by the mission and by doing the right thing."

Louise Hemstead agrees. "We really try to recruit people who want to be here not because they're making a six-figure salary, because they're not, but because they share our passion: a passion for the environment, a passion for organic farming, a passion for family farming."

'The mission'

A sense of mission is a defining characteristic of the Organic Valley operation. At the core is the co-op's pledge to protect family farmers and rural communities by working toward "economic and environmental sustainability" through organic farming.

By "organic" the co-op settles not for the technical definition enforced by federal regulations but a Siemonesque holistic view: "A philosophy and system of production that mirrors the natural law of living organisms with an emphasis on the interdependence of all life."

With unabashed directness, the co-op's goals mix economic, social and cultural agendas into one big organic manifesto. (See "On a mission" on page 15.)

That message has become a potent selling point in the new era of green marketing. The Organic Valley label, research shows, is one of the strongest brands in the entire natural foods business.

For consumers worried about unhealthy chemical residues (a key concern for new mothers, by far the largest category of new organic customers), the Organic Valley label is a trusted source. The co-op markets directly to these health concerns with its hip-yet-nostalgic design.

Its soy carton, for example, contains a photo of the actual Iowa farmer, Wayne Wangsness, who grows Organic Valley's soybeans. "We wouldn't think of using synthetic herbicides, pesticides or fertilizers on our fields," he promises. "Our aim is to provide the very best nutrition and taste while being excellent stewards of the Earth."

Organic Valley's cow milk carton, meanwhile, highlights its commitment to cooperative ownership, consumer connection to local family farmers and "high standards for animal well-being."

"We didn't need a high-priced consultant to make up our marketing line," Bedessem says. "We could communicate it ourselves because this is what we believe. We are authentic."

Most farmers, however, aren't buying. Farming organically is just too radical a change.

What's required

"Organic is a whole new way of thinking for farmers," says Tom Miller. "You have to believe in the philosophy, first of all – that it's better for you, it's better for the environment. You have to believe that what you're doing is the right thing to do."

That "right thing to do" is defined by the National Organic Program as enforced by the U.S. Department of Agriculture.

Twelve years in the making and subject to countless skirmishes over content, the rules for certifying "USDA organic" products didn't take effect until 2002. Those rules require would-be organic farmers to forgo farming methods they've probably been using all their lives, never an easy decision.

For example, farmers have to stop all chemical applications to their fields for at least three years to be certified as organic. Sewage sludge is banned as a fertilizer. Growth hormones can't be injected in cows. Genetically modified plants are barred. Irradiation of organic products is banned. All feed has to be organically raised.

And synthetic pesticides and herbicides, two mainstays of the farmer toolkit, are verboten.

"You have to accept a few weeds," Tom Miller says. "That's why a lot of farmers won't go organic. They don't think they can control those weeds without chemicals, because the chemical companies have them so brainwashed."

When the Millers made the transition from conventional to organic farming, "That's what we heard most from our neighbors: 'How are you going to control all those weeds?' But we've proven over the last 10 years that it can be done," he says, as cousin Jim Miller nods in agreement.

The Millers rotate crops – corn, soybeans, alfalfa – from year to year to maintain proper soil balance. Certain weeds grow better in low-pH soils, so they add calcium and trace elements like sulfur, boron and zinc.

"Once you get that balance down, you eliminate a lot of the tough weeds in the corn," Jim Miller says.

For dairy and cattle herds, pasturing is another critical component. Federal organic standards require that cattle forage for at least a 120 days a year rather than being fed in the barnyard.

While much of the conventional milk sold comes from cows raised in huge feedlots (in herds as big as 5,000 cows), organic bossies are still ruminating over green grass. For its 320-cow herd, the Millers maintain 250 acres of pasture.

Organic proponents say grazing makes organic milk healthier than conventional milk because it raises the content of CLA (conjugated linoleic acid), a "good" fatty acid similar to the omega-3 found in fish.

Despite swearing off the advantages of chemical treatments, the Millers say they exceed the state average for soybeans, harvesting 51 bushels per acre versus the state average of 42 bushels and fall just short of the 150-bushel state average per acre for corn.

The Millers average 18,000 to 19,000 pounds of milk per cow annually. That's less than the 21,000 to 22,000 pounds per cow average for large commercial herds. But, says Jim Miller, "They're really pushing those cows, and their life expectancy is really short."

UW ag researchers have found that "grazer" farms like the Miller operation are more profitable than comparable "containment" farms because of their lower feed costs. And organic dairy farmers have another advantage: They're paid a price premium over conventional milk.

Indeed, the CROPP co-op's greatest success has been its ability to maintain a stable "pay price" for its dairy farmers. (See "A stable price for farmers" on page 13.) This stability, born of the co-op adeptly managing the supply of organic milk to match consumer demand, is a source of great pride for the co-op managers.

"2006 was a banner year for us," Bedessem told the co-op's annual meeting this past summer. "We've had record sales, record farmer prices, record profits. It was the trifecta."

Last year was so strong, in fact, that the co-op paid an unexpected "13th" monthly check to its farmer-owners, gave a bonus to its staff and made an additional contribution to its charitable fund.

It was such a good year that Louise Hemstead says her husband, David, bought a new manure spreader and a new truck.

"You can laugh, but this is the first brand-new pickup he's ever had in his life," she says. "He couldn't have done it, and stayed in the black, if he were still farming conventionally."

Sleeping with the enemy?

Despite its evident success, Organic Valley has its critics. Some organic supporters complain that the co-op made too many accommodations with big corporate producers in structuring the national regulations for organic certification.

The regulations supplanted the varied and sometimes conflicting organic rules enforced by more than 20 states – and effectively created a single national organics market. The major food processors loved that.

"They've developed a bloodlust for the higher per-unit revenues of organics," says Pete Hardin, the firebrand editor of The Milkweed dairy newspaper, which is headquartered outside of Madison in the village of Brooklyn.

Hardin, a veteran crusader against the use of synthetic growth hormones in dairy herds, praises Organic Valley for trailblazing the path for organics to succeed in the marketplace. But he faults the co-op for "falling into bed" with factory-style organic milk producers like Aurora and Horizon by supporting what he feels are lax organic regulations.

"The big guys would like to pave over that organic path with a six-lane interstate highway," Hardin asserts. "They have no qualms about burying the organic pioneers under the concrete."

Hardin argues that the USDA has largely failed to enforce the pasture rules for factory-style dairy and poultry farms. There's "no way," he says, that a 2,500-cow herd can sufficiently graze and be moved back and forth to the barn for milking.

"These mega-dairies – Horizon and Aurora – are ignoring the access-to-pasture rules," he charges.

On Aug. 29, the USDA lent credence to Hardin's complaint. It announced a consent agreement in which Aurora, the nation's largest organic milk producer, agreed to sharply reduce its herd and reform its dairy operation or risk losing organic certification.

The settlement came after the Cornucopia Institute, a Wisconsin-based farm policy group, filed complaints alleging that Aurora was willfully ignoring pasture rules, among other trespasses, at its factory farms in Colorado and Texas. One of those herds numbered between 4,000 and 5,000 milking cows, according to Cornucopia.

The advocacy group praised the USDA for ordering changes to Aurora's operation, but argued that Aurora should also be fined "for deliberately abusing organic integrity… and for flooding the market with bogus organic milk."

Jim Goodman, an organic dairy and beef farmer in Wonewoc, is also troubled that Organic Valley has worked with giants like Aurora in formulating organic rules.

"Organic Valley wants to use small farmers in their marketing for the good homey feeling they bring, but they're supporting an entirely different type of industrial farming," he says.

Goodman, whose 500-acre Northwood Farm sells organic milk to cheesemakers and organic beef at the Dane County Farmers' Market, has chosen not to join CROPP.

"I know a lot of their farmers," he says. "They're great people, good friends and good neighbors. But it seems to me that management is sort of leaving them behind in some ways.

"Like most businesses, they probably think they have to get big to survive," says Goodman, with evident distaste.

Siemon, a key player in the national debate on organic standards, seems pained by the charges. He sees the conflict as a choice between compromise standards acceptable to most parties and the collapse of any national certification at all.

"We've tried very hard to be the voice of reason between the purist radicals and the big corporate farmers," he says. "We've tried to be a bridge, but the discussion has gotten so passionate."

To Siemon's thinking, the standards are the floor to what's acceptable as organic – not the measure of CROPP's expansive organic vision.

The next generation

The mainstreaming of organics is one of Organic Valley's great accomplishments. But it's also a source of creative tension within the co-op: How do you reach out to the mass market at Publix and Woodman's while staying connected to their most loyal consumers at the Willy Street Co-op?

Theresa Marquez, the co-op's chief marketing officer, says mass-market stores are providing the greatest growth in sales, while natural food store sales are flat.

"Yes, we're growing in the mass market, but our love and devotion is still in the natural market," she says. "That's the group we want to cater to. They are the core organic shopper. They are the pioneers."

As for the mass-market stores, Marquez says, "The organic family needs to embrace this new sister and brother. We can't be afraid of new people coming into our industry."

Bottom line, greater sales will allow more organic farmers to be brought into the co-op's regional producer pools. Hemstead says Organic Valley could hit $1 billion in revenue in five to seven years.

"Is it our goal to be a billion dollars? No, it's not," she says. "We measure our goals by two numbers: Are we paying a sustainable 'pay price' to our members and how many farmers are we servicing? Those are the goals we're managing to. Not what the total dollar sales are."

That's "the mission" that the management team holds to, says Bedessem.

"We know what our job is: It's to get CROPP to the point where our farmers have a choice – they can farm, they can retire, they can sell to the kids. That's the exit strategy for our current farmers – it's a future for their kids."

That scenario resonates at R&G Miller and Sons, where the eight family members have been meeting lately to discuss the farm's future.

"I'm definitely going to be here," says Mandy Petrie, Tom Miller's daughter. Petrie, 28, works as the farm's office assistant and sees herself moving up to a more important managerial job in the years to come.

Like her dad, she's a farm kid who came home. Petrie worked for five years in finance in Colorado, and hated it. Back on the farm, Petrie has embraced the organic life. "I never realized how important organic food was before," she says.

She and her husband, Ted, a truck driver, have a two-year-old son, Jack. Someday, if Organic Valley's remarkable success continues, Jack might be the next generation running the Miller farm.