June, 09 2009, 11:38am EDT
Scandal Fuels Meltdown in Organic Dairy Industry
Farmers Seek Justice from Obama, USDA; Consumers Headed Back to Court
WASHINGTON
A slowdown in the
sales of organic milk and dairy products, attributed in recent articles by the New
York Times and other media outlets to the weakened economy, has organic
dairy farmers from coast to coast at or near financial collapse. But a
worsening scandal in the industry might be doing more to economically injure
organic family farmers than the flattening of demand for organic dairy
products.
Since 2005, a handful of giant factory farms, each milking
thousands of cows, have been accused of skirting strict federal organic
regulations and creating a surplus of cheap "phony" organic milk
flooding the market and driving down profit margins for legitimate industry
participants. The Cornucopia Institute estimates that as much as 30-40%
of organic milk is now coming from giant industrial operations, milking as many
as 7000 cows each.
Last week, a judge in federal district court in St. Louis,
rejected 19 class-action lawsuits filed by consumers who are claiming fraud in
the sale of "organic" milk coming from one of the giant
operations. In 2007, federal investigators found the Aurora Dairy had
"willfully" violated 14 different federal organic regulations.
Consumers in 40 states sued, alleging fraud in the manufacture of organic milk
sold as storebrands in Wal-Mart, Target, Safeway, Costco and other national
chains served by Aurora.
Lawyers representing consumers
involved with the class-action lawsuits vow that they will appeal the
judge's initial ruling, especially in light of a recent Supreme Court
decision that clearly gives citizens the right to sue corporations that
allegedly act illegally even though federal regulatory agencies provide
statutory authority over certain industries.
According to Mark Kastel, the Senior Farm Policy Analyst for
The Cornucopia Institute, the dismissal was particularly distressing
"because Bush Administration officials had substantially softened USDA
penalties recommended by enforcement staff for Aurora's organic
transgressions." Cornucopia first alerted the USDA to
Aurora's violations by filing formal legal complaints with the agency.
"The very essence of the checks and balances system in
our three branches of government provides for citizens to seek remedy, when
regulatory agencies fail to enforce laws passed by Congress," said Gary
Cox, a Columbus, Ohio-based attorney with experience in the organic industry.
"It is our contention that a judicial review of the alleged
misconduct by these giant corporations, and the lack of enforcement by the
USDA, is not only appropriate but imperative."
The outcome of the pending suits will not only impact
consumers but many organic dairy farmers whose livelihoods are now threatened
by the giant corporate dairy marketers. A glut of organic milk on the
market now has the nation's organic processors attempting to reduce their
supply and cutting prices paid to farmers. Dean Foods, the nation's
largest milk processor, and owner of the Horizon Organic brand, and H. P. Hood,
a giant Boston-based milk bottler, that controls the Stonyfield milk label,
have both terminated contracts with farmers or allegedly attempted to strong
arm some of them out of business.
"I have invested my life in building this dairy farm,
and Hood encouraged many dairy producers to make major investments and ramp-up
for organic production, now my entire livelihood and the financial future of my
family is at risk," said Kevin Poetker who milks 200 cows near Waterloo,
IL, 24 miles SE of St. Louis.
Even Organic Valley, the farmer-owned cooperative that is
second only to Dean Foods in organic milk sales, has cut prices to their
members and asked them to reduce their milk production by 7%.
"Farmers who build their herds make long-term financial and management
decisions, and just shutting off even 7% of their milk is no easy task,"
Kastel said.
Thousands of letters, mostly from organic farmers, have been
sent to president Obama and USDA secretary Tom Vilsack asking them to
immediately intervene and undertake aggressive enforcement of organic
regulations, something lacking during the past administration.
The USDA's handling of the Aurora violations is not
the only instance where its enforcement actions have gone awry. Other
alleged violations have gone uninvestigated by agency staff. Cornucopia
has filed several additional complaints, based upon direct observation of
practices employed on other huge feedlot dairies owned by Aurora and Dean
Foods.
"Either the USDA refused to investigate or, when they
actually found violations, they have allowed illegal activities to
continue," Kastel lamented. "We are now appealing to the Obama
administration for a more ethical approach to enforcement in these
matters. Congress gave the USDA the responsibility of overseeing the
organic industry and now we are happy that some on Capitol Hill are considering
launching an investigation into, seemingly, favorable treatment for some corporate
players."
If there is good news for
consumers, it's that they have alternatives in the marketplace.
"Consumers seeking authentic, nutritionally superior organic milk have
many choices and we hope they will support the family farmers, the heroes who
built the organic industry," stated Ronnie Cummins of the Organic
Consumers Association.
A multi-year research study by The Cornucopia Institute
created a scorecard, posted on its website (www.cornucopia.org),
rating all 110 organic brands based on their ethical and legal approach to milk
production. The study indicates that 90% of organic milk, cheese, butter
and yogurt marketers are clearly subscribing to both the "spirit and
letter of the organic regulations."
"These giant factory farms are a bad aberration.
Unfortunately they are associated with a couple of the largest participants in
the industry. We need consumers to step up and make careful choices in
the supermarket so they reward the true heroes in this industry and send a
strong message to the bad actors," Kastel said. "Some organic
farmers out there desperately need the help and support of consumers."
- 30 -
A copy of the judge's decision, from the US District Court,
Eastern Division of Missouri, in St. Louis, can be obtained by contacting The
Cornucopia Institute.
The organic dairy products scorecard can be viewed at:
https://www.cornucopia.org/2008/01/dairy-report-and-scorecard/
The Cornucopia Institute website is:
The USDA's National Organic Program website is:
The Cornucopia Institute, a Wisconsin-based nonprofit farm policy research group, is dedicated to the fight for economic justice for the family-scale farming community. Their Organic Integrity Project acts as a corporate and governmental watchdog assuring that no compromises to the credibility of organic farming methods and the food it produces are made in the pursuit of profit.
LATEST NEWS
From Soaring Energy Prices to Climate Threat to AI Bubble, Experts Warn Against Data Center Buildout
“Tech giants are cutting backroom deals with utilities and government officials to build massive data centers at breakneck speed, while passing the costs onto working families," said the author of a new Public Citizen report.
Dec 04, 2025
As the construction of artificial intelligence data centers expands across the nation largely unregulated, experts warn that the unrestrained buildup of these facilities is causing electricity costs to skyrocket, accelerating the climate crisis, and putting the economy at risk.
A new report out Thursday from the consumer advocacy group Public Citizen highlights the "unchecked expansion" of these data centers, often with little oversight, input from communities, or even financial responsibility on the part of the Big Tech firms profiting.
“We’re watching Big Tech overlords write their own rules in real time,” said Deanna Noël, Public Citizen's climate campaigns director and one of the report's authors. “Tech giants are cutting backroom deals with utilities and government officials to build massive data centers at breakneck speed, while passing the costs onto working families through higher electricity bills, polluted air and water, and false claims about job creation."
A forecast published earlier this week by Bloomberg New Energy Finance projected that the power demand for AI facilities will hit 106 gigawatts by 2035—a 36% jump from what it predicted back in April.
That dramatic increase, it said, can be attributed not just to the more rapid buildup of AI facilities, but also to the size of the ones being constructed: "Of the nearly 150 new data center projects BNEF added to its tracker in the last year, nearly a quarter exceed 500 megawatts," it found.
This faster-than-expected expansion has come with massive consequences for the people living near the power-sucking behemoths. Public Citizen's report found:
Residents’ electricity costs in some data center-dense areas have surged over 250% in just five years. At PJM—the world’s largest power market—capacity auction prices spiked 800% in 2024, in part due to data center growth. That same year, consumers across seven PJM states paid $4.3 billion more in electricity costs to cover data centers’ new transmission infrastructure.
On Wednesday, CNBC reported on findings from a watchdog report that PJM's 65 million consumers will pay a total of $16.6 billion to secure future power supplies needed to meet demand from AI data centers from now until 2027, approximately $255 per person on average.
In some of the states with the most data centers, residential electricity prices have spiked considerably over the past year. In September, they were up 20% in Illinois, 12% in Ohio, and 9% in Virginia, according to data from the federal Energy Information Administration.
The massive surge in electricity usage is also fueling the climate crisis. As of March 2025, 56% of the electricity used to power data centers came from fossil fuels, a share that is likely to increase now that the Trump administration has pushed to expand the extraction of coal and other planet-heating energy sources in order to power them.
"At the very moment we must rapidly phase out fossil fuels," Noël said, "the Trump administration is doing the opposite—fast-tracking data center development powered by coal, oil, and gas."
Tech companies like Amazon, Meta, and Google that benefit from these projects rarely have to bear the full economic cost, instead passing some of it onto taxpayers, often without public debate due to nondisclosure agreements that keep the details of proposals under wraps until deals are finalized.
"In the race to attract large data centers, states are forfeiting hundreds of millions of dollars in tax revenue," a June CNBC investigation found. The report determined that 42 states provide full or partial sales tax exemptions to data centers or have no sales tax at all. Thirty-seven of those states have legislation specifically granting sales tax exemptions for data centers.
While these exemptions are often granted following promises of economic growth and job creation, as the Public Citizen report argues: "They rarely deliver on these promises. Data centers create few permanent, high-paying jobs, and generous tax breaks deprive communities of critical revenue needed to fund schools, infrastructure, and other public services."
Data centers have increasingly faced pushback from local communities. On Wednesday night in Howell, Michigan, over 150 people assembled at a town hall in opposition to a proposed $1 billion "hyperscale" data center project backed by Meta, following days of protest.
“Already we have started to see many regions (across the country) realizing that the huge spike in electricity demand from data centers is straining the grid, and this is only going to get worse as the growth of data centers increases based on the projected and planned investments,” said one of the panelists, Ben Green, an assistant professor of information and public policy at the University of Michigan.
Economic analysts, meanwhile, remain skeptical about whether the rapid buildup of AI infrastructure will be sustainable in the long term, given the extraordinary energy demand.
In November, Morgan Stanley projected AI-related data center spending will total $2.9 trillion cumulatively from 2025 to 2028, with roughly half requiring external financing.
Abe Silverman, general counsel for the public utility board in New Jersey, pointed out to CNBC the unease communities are feeling about "paying money today for a data center tomorrow."
“We’re in a bit of a bubble,” he warned. “There is no question that data center developers are coming out of the woodwork, putting in massive numbers of new requests. It’s impossible to say exactly how many of them are speculative versus real.”
Cathy Kunkel, a consultant at the Institute for Energy Economics and Financial Analysis, said, "It does tend to be consumers—residential, commercial, and other industrial ratepayers—that end up paying for overbuilt electrical infrastructure."
The health of the entire US economy, it turns out, may be hitched to this "bubble." As the Wall Street Journal reported in late November, "business investment in AI might have accounted for as much as half of the growth in gross domestic product, adjusted for inflation, in the first six months of the year."
OpenAI founder Sam Altman raised eyebrows last month when he suggested that if the bubble bursts, his company is too big to fail, and would likely receive a large taxpayer-funded federal bailout: "When something gets sufficiently huge... the federal government is kind of the insurer of last resort as we've seen in various financial crises," Altman said. "So I guess given the magnitude of what I expect AI economic impact to look like, sort of I do think the government ends up as like the insurer of last resort."
A looming financial bubble related to AI's rapid growth, alongside the various other concerns related to the data center buildout, is why Public Citizen says policymakers must understand the gravity the situation and be willing to push back against an industry that has built an army of lobbyists to press its interests on Capitol Hill.
"Policymakers at all levels of government must act with urgency to rein in Big Tech’s unchecked expansion," Noël said. "By demanding transparency and accountability, enforcing strong community protections, and requiring clean and cheap renewable energy, policymakers can shield consumers from soaring electricity costs, reduce emissions to protect public health, and align this buildout with the clean energy transition.
"Without urgent intervention," she said, "Big Tech will continue getting a free ride while more neighborhoods are turned into sacrifice zones for Silicon Valley’s tech tycoons—fueled by the fossil fuel industry.”
Keep ReadingShow Less
'Where Is Yuanxin?' 6-Year-Old Missing in DHS Custody After ICE Separated Him From Father at Check-In
"Six-year-old Yuanxin had just enrolled in the first grade at an elementary school in Astoria," said Mayor-elect Zohran Mamdani. "Now he's in custody, alone. ICE won't say where. This cruelty serves no one."
Dec 04, 2025
New York City Public Advocate Jumaane Williams on Thursday said the Trump administration continues to tell the "cruel lie" that it does not separate children from their families in immigration enforcement, as he joined other city officials and advocates in demanding the Department of Homeland Security immediately release a six-year-old boy who was taken from his father during an immigration check-in in Manhattan more than a week ago.
"Six-year-old asylum-seeker Yuanxin has been separated from his father, held at an undisclosed location," said Williams.
As The City reported Tuesday, US Immigration and Customs Enforcement officers arrested Yuanxin's father, Fei, when they arrived at 26 Federal Plaza—the ICE headquarters and immigration court that's become notorious for federal agents' violent treatment of immigrants and advocates under President Donald Trump—on November 26.
Fei, who sought asylum when he and his son crossed the US border in April, was sent to Orange County Jail in New York, while his son, a public school student in Queens, was separated from him. ICE agents did not tell Fei where they were taking Yuanxin.
Tricia McLaughlin, a spokesperson for DHS, said in a statement this week that while agents were attempting to take Fei north to Orange County, he "was acting so disruptive and aggressive that he endangered the child’s well-being." She accused him of attempting to "escape and abandon his son."
While acknowledging that the two had been separated, McLaughlin said, "ICE does not separate families.”
A judge "administratively closed" the family's asylum case in September, The City reported, which "would have been seen as a positive step and indicated that DHS wasn’t actively seeking the person’s deportation" under previous administrations.
They were also released on a yearlong parole after having been previously detained, and were required to visit 26 Federal Plaza for check-ins with ICE.
According to the Deportation Data Project, at least 151 children under the age of 18 have been arrested and detained by ICE since January.
Diana Moreno, an immigrant rights advocate who is running for the state Assembly in District 36, spoke to CBS News on Tuesday about Yuanxin's detention.
"To see their classmates disappear overnight is something that no parent wants to explain to their kid why this is happening," said Moreno.
The New York Immigration Coalition also demanded that the father and son "be reunited with each other immediately," while Mayor-elect Zohran Mamdani condemned the Trump administration's "cruelty."
"Six-year-old Yuanxin had just enrolled in the first grade at an elementary school in Astoria," said Mamdani. "Now he's in custody, alone. ICE won't say where. This cruelty serves no one. It must end."
Chuck Park, a candidate for US Congress in New York's 6th District, also in Queens, said Yuanxin "looks like my son did at that age."
"Big glasses. Sweet smile," said Park. "Now alone, scared at an unknown ICE detention center. Taken from his dad at a routine check-in. This is what we're fighting against. This kid is who we're fighting for."
Keep ReadingShow Less
Medicare for All Sees Key Polling Shift as Americans Fume Over Surging For-Profit Insurance Premiums
"Everybody recognizes that our current healthcare system is broken," said Sen. Bernie Sanders. "That’s why over 60% of the American people support Medicare for All."
Dec 04, 2025
With Affordable Care Act premiums surging and lawmakers on both sides of the political aisle scrambling to cobble together a last-minute fix, recent polling data shows that a strong majority of the American public supports a transformative proposal that few members of Congress are vocally advocating.
Data for Progress released survey results late last month showing that 65% of likely US voters—including 78% of Democrats, 71% of Independents, and 49% of Republicans—either strongly or somewhat support "creating a national health insurance program, sometimes called 'Medicare for All,' that would cover all Americans and replace most private health insurance plans."
Overall support for such a system dropped just two percentage points when survey respondents were informed that Medicare for All would replace insurance premiums with higher taxes, abolish most private insurance, and eliminate copays and deductibles. In an analysis posted last week, The Lever's David Sirota observed that those results are a shift from earlier polling showing a sharp decline in support for Medicare for All once respondents were told the proposal would wipe out private insurance.
"That might have been the end of Medicare for All for another generation—except now the ACA is epically and undeniably failing to guarantee 'affordable' healthcare," Sirota wrote. "As private health insurers are now jacking up premiums for tens of millions of Americans, a new poll shows a huge majority of Americans now want Medicare for All—even if it entails eliminating private insurers and raising taxes."
The Data for Progress survey came as Republican and Democratic lawmakers continued floating temporary, Band-Aid solutions to avert catastrophic premium increases stemming in large part from the looming expiration of enhanced ACA tax credits, which lapse at the end of the year.
A new poll released Thursday by KFF found that "six in ten adults (61%) who buy their health coverage on the ACA marketplace say it is very or somewhat difficult to afford their deductibles and out-of-pocket costs for medical care."
"When asked what they would do if the amount they pay for health insurance each month doubled, one in three enrollees (32%) say they are very likely to shop for a lower-premium plan (with higher deductibles and out-of-pocket costs), and one in four (25%) say they would be very likely to go uninsured," KFF noted.
Senate Majority Leader Chuck Schumer (D-NY) on Thursday pitched a three-year extension of the ACA subsidies ahead of a planned vote next week—a proposal that Republicans are certain to oppose.
On the Republican side, Sen. Rick Scott (R-Fla.)—who is linked to the largest Medicare fraud case in US history—is convening a group of Republican lawmakers to craft a likely dead-on-arrival ACA alternative that would implement some proposals floated by President Donald Trump, including new savings accounts that critics say would further enrich banks and insurance giants.
Scott warned in a statement to Axios earlier this week that "the more Republicans refuse to engage on this issue, the more we allow radical Democrats to lead our country on a slow creep towards the Socialist single-payer healthcare system they've always wanted."
House Speaker Mike Johnson (R-La.), meanwhile, is reportedly planning to finalize a healthcare bill early next week, though no details were immediately available.
There's also a bipartisan framework led by Reps. Josh Gottheimer (D-NJ) and Jen Kiggans (R-Va.), which calls for a one-year extension of the enhanced ACA tax credits "with targeted modifications," including intensified means-testing that would phase out the subsidies for those with incomes between 600% and 1,000% of the federal poverty level.
The Medicare for All Act, led by Sen. Bernie Sanders (I-Vt.) in the Senate and Reps. Pramila Jayapal (D-Wash.) and Debbie Dingell (D-Mich.) in the House, would have no such means-testing, guaranteeing comprehensive coverage to all for free at the point of service.
"Everybody recognizes that our current healthcare system is broken. That’s why over 60% of the American people support Medicare for All," Sanders said at a rally with nurses in the nation's capital on Wednesday. "The day will come when working-class Americans will be able to go to the doctor, dentist, or a nursing home without having to worry about the cost. We’re going to win this fight."
Keep ReadingShow Less
Most Popular