Colo. dairy in Md. to milk organic trend A $2 million bet says market will continue to be a bonanza

Milk

December 18, 1997|By Ted Shelsby | Ted Shelsby,SUN STAFF

CHESTERTOWN -- A Colorado company is betting more than $2 million that it can make money milking cows in Maryland where so many others have failed.

As its name implies, Horizon Organic Dairy Inc., of Boulder, is taking a slightly different approach to the dairy business.

"No, we're not crazy," said Paul Repetto, Horizon's co-founder and vice president of operations. "We know the dairy industry is struggling in Maryland, but we can't meet the demand for organic milk in the Baltimore-Washington market.

"There have been times when we have completely run out of milk," Repetto said of a product that costs nearly 45 percent more than the Cloverland Greenspring Dairy milk sold at the Fresh Fields store in Mount Washington, $2.29 vs. $1.59 per half gallon. To boost its milk supply and cut the cost of trucking milk to the region from Idaho, Horizon has acquired the rundown former Genfarm dairy farm, about six miles north of this Kent County college town.

It's Horizon's second farm. It has a 4,000-acre spread near Twin Falls, Idaho, that milks 3,500 cows.

The Maryland farm is undergoing a multimillion-dollar renovation to convert it into a modern, organic dairy farm that could handle 1,000 Holsteins.

The farm's first shipment of 38 cows arrived Monday.

They were outnumbered, nearly two-to-one, by construction workers.

The shopping center-sized complex, on 470 acres, was bustling with activity this week.

Workers were rebuilding the barn, stretching electric wires, installing plumbing, repairing the roof and constructing a new milking parlor.

Another crew was pumping out the last of 10 million gallons of a black, soup-like mixture of waste water and manure from two holding ponds, compliments of the previous owner.

"It's refreshing to see somebody come in and clean up what had become an eyesore on Route 213," said Edward Fry, who owns a nearby dairy farm. "It looked bad. It has been empty for about two years and had grown up in weeds."

Horizon, the first commercial organic dairy farm in the state, expects to begin milking cows in January and have 500 Holsteins by the end of April, said Keith Boone, the farm's manager.

The goal is to have about 1,000 cows, producing a truckload of milk -- 6,000 gallons -- a day.

Boone couldn't say when that would happen.

He said that the farm's environmental permit, issued in June, allows for only 500 cows.

"We have to first prove that we are good stewards of the land before the Maryland Department of Environment will approve a larger operation," he said.

When construction is completed in two years, the Chestertown operation will be more than a dairy farm where cows are free of growth hormones and fed on fodder without synthetic pesticides, herbicides or fertilizers, said Amy Barr, a company spokeswoman.

Plans call for a visitor center where schoolchildren, consumers and farmers can learn first hand about organic farming and dairy practices.

'Cows are girls'

"People will see the cows milked," said Barr. "And they will learn that all the cows are girls and they are not milked until they have babies."

Horizon will also offer some business opportunities for other farmers in the area, said David Taylor, the Kent County economic development director.

Boone agrees. He said the new dairy farm will be looking for local suppliers to provide organic feed, including nearly 2,600 tons of alfalfa hay each year along with 1,300 tons of barley and 891 tons of corn.

Organic feed costs about 20 percent more than nonorganic feed because it is more labor intensive to grow, Boone said.

The same is true for suppliers of milk.

Repetto said Horizon will also be getting some milk from Amish farms in Lancaster County, Pa. "By the nature of the way they farm -- they don't use chemicals -- these Amish farms had to make only slight adjustments to be certified organic," he said.

Repetto said Horizon pays Amish farms between $4 and $4.50 a hundredweight more for their organic milk than the approximately $15 they were getting from conventional dairies.

Horizon, which is privately owned, was started in 1992. Its first product was a nonfat organic yogurt.

Repetto said the company moved into the milk market in September 1993, selling in California, Colorado and at the Fresh Fields store in Rockville.

"This was a test market," he said. "We had no idea if people wanted organic milk or not and we didn't know how much they would want."

Credits growth hormone

He said the company got a big break in 1994 when the federal government approved farmers' use of a controversial growth hormone that would cause cows to produce more milk.

"The government's decision stimulated the market," said Repetto. "It caused consumers to look for milk without additives. BTC Sales took off. We ran out of milk. We couldn't meet demand."

In recent years Horizon has added butter, sour cream and a variety of cheeses to its list of organic dairy products.

Repetto said sales have doubled every year and the company expects to gross $30 million this year.

Its products are now sold in all 50 states, in more than 2,000 natural food stores and 3,500 conventional supermarkets.

Pub Date: 12/18/97

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