Californian organic dairy producer Straus Family Creamery and Horizon Organic Holding Corp, a leading brand of organic foods in the US and UK, have filed a lawsuit in the US District Court for the Northern District of California over California’s Milk Stabilisation & Pooling Plans.

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Horizon and Straus are also seeking an injunction to prohibit the continued application of the Plans to their organic dairy operations. The complaint alleges that the Plans violate their rights to equal protection and due process, and that state-imposed pooling fees require the two companies to subsidise the conventional dairy industry.


At issue are state regulations that require all California dairy processors to contribute fees into a “pool” designed to ensure sustainable income for milk producers. However, Horizon and Straus argue that the system was designed to reflect only the values of conventional milk and to generate reasonable incomes for conventional producers.


Due to compliance with the California Organic Foods Act and the USDA National Organic Programme standards, the cost of producing organic milk is substantially higher than the cost of producing conventional milk. The Milk Stabilisation and Pooling Plans do not take this factor into account in calculating the pooling fees charged to organic processors. Furthermore, the California Department of Food & Agriculture distributes the money Straus and Horizon contribute to the pool to conventional dairy processors.


Albert Straus, president of Straus, explained: “We figure the people who buy our milk are paying about US$0.50 per gallon more than they should because of these unfair fees. He added that in the past eight years the creamery has paid almost US$2m in pooling fees, more than it has spent for its entire marketing budget.

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“The organic milk pooling obligations force Horizon Organic, its contract producers and its consumers to support the conventional dairy industry,” added Kelly Shea, director of organic agriculture at Horizon: “Consumers are led to believe that the premium they pay for organic food products is supporting organic and sustainable agriculture, when in fact, a significant portion of the organic buyers’ dollar is supporting the conventional milk system.


“We believe the two industries to be separate, and therefore organic processors should be exempt from the Milk Pooling Plan.”