Status of Wisconsin Agriculture 2010 - Agricultural & Applied ...

Spatial Expansion of Organic Dairy Farms in Southwest Wisconsin
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• Organic farms
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Conventional farms
* Organic Valley
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5 organic farms
ers commensurate with the cooperative’s penetration
and sales growth in new markets. Each year, contracts
with members coordinate on both price and quantity.
Members seeking to make significant expansions or
increases in production need the Organic Valley’s
explicit permission to add more milk to the cooperative’s
regional pool. In periods of rapid demand growth,
quantity restrictions were not much of an issue, but they
were written into the contract and in producer’s expansion
plans. This meant that joining Organic Valley
Cooperative was easier during periods of initial expansion
into markets than when it had become established
in a market, unless demand growth was strong enough
to warrant adding new members. In other words, for
Organic Valley Cooperative, a fundamental aspect of
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1998 2001
2004
81 organic farms 131 organic farms
46 STATUS OF WISCONSIN AGRICULTURE 2010—FRAMING THE FINANCIAL CRISIS
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39 organic farms
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2008
developing an effective supply management strategy
has been limiting the number and rights of members
and coordinating their production. To reiterate, this
approach is not novel to cooperatives. There is a long
history of such efforts, as cooperatives have legal rights
to try to shape supply conditions in a way that private
firms do not.
It is no accident that in 2009, when it faced the end of
tremendous demand growth and the prospect for much
lower prices, Organic Valley had the supply management
architecture in place to deploy. It was part of the
cooperative’s original organizational design, available
when needed. When it was needed, the cooperative’s
leadership activated it. Of course, it did not hurt that
Organic Valley was a national market leader of organic