Organic Farmers Cashing In But All-Natural Products Aren’t A Sure Bet For Growers

Suburban yuppies are going organic.

And country farmers such as Joe DeLong and Byron Siemers are cashing in.

DeLong operates a hog ranch on Hells Canyon Road near St. John, Wash., where he fattens up 450 animals with organic corn, barley and peas.

Siemers raises organic carrots on Green Bluff, distributing them to seven health food stores in Spokane. Once inside the stores, Siemers’ carrots fetch a 50 percent premium over non-organic produce.

“A lot of people want stuff that isn’t saturated with chemicals,” says Siemers, who hand picks his five acres of carrots each summer. “If we can do that for them, then we’ll make some money.”

As the organic and natural food craze seeps into mainstream America, a growing number of Inland Northwest farmers, food processors and distributors are preparing to capitalize.

Willow Winds Organic Farm, 20 miles west of Spokane, produces tons of potatoes, which a Moses Lake processor converts into frozen hash browns sold in supermarkets. Rose Valley Farms in Kettle Falls ships organic chickens and eggs across the country. The Jorgenson Brothers in Coulee City grow hundreds of acres of organic wheat. Delong says he holds the nation’s only organically raised pork certificate.

“Basically I’ve been farming this way all my life,” says DeLong, who distributes Sara Joe’s Pork Products to several stores in Washington. “I’ve had a lot of requests to sell to other places, and a lot of pressure because I’m often competing with regular pork and beef.”

But organic farming isn’t a sure bet. As the industry consolidates, some veterans are getting squeezed out by large distribution networks that go to California and other big agricultural centers to get produce and livestock.

Rodney Repp of Endicott, Wash., has been growing organic food for a decade. But when a Chewelah organic dairy folded two years ago under pressure from a competing organic milk distributor, Repp lost a key customer for his feed. Stranded outside the loop of mainline organic distribution, Repp says he has had difficulty getting his feed and organic beef to other dairies and stores.

“If you’re in the right niche, and have the right connections, the business is increasing,” says Repp, who was one of the first to grow crops certified organic by the Washington State Department of Agriculture. “At one time, I thought organic food held promise for local growers, but I don’t see that now.”

Rosauers Supermarkets, which recently opened the new Huckleberry’s Fresh Market on the South Hill, gets about half its inventory from local producers and independent distributors. The rest comes from Mountain Peoples Northwest, a giant distributor in Seattle.

The story of Mountain Peoples illustrates how organic food has become a multimillion-dollar industry.

From humble beginnings, when President Michael Funk sold organic crops out of the back of his pickup, Mountain Peoples has become the largest distributor of natural foods on the West Coast.

Mountain Peoples two years ago gobbled up Nutrasource Inc. in Seattle and merged last year with Cornocopia in Connecticut. A parent company, United Natural Foods, was formed and Smith Barney helped sell UNF stock to Wall Street investors.

UNF currently generates nearly $400 million in annual sales, distributing 25,000 separate products to 5,500 stores nationwide. The 100,000-square-foot Seattle warehouse will garner $60 million in sales this year, says general manager Douglas Hanson.

“This (organic and natural foods) is one of the few growing segments in the grocery industry,” he says. “That’s why Rosauers and others are getting into it.”

Washington and Idaho officials do not track organic sales in grocery stores, but they issue organic certificates to growers, processors and handlers.

The number of state certified farmers has grown from 105 in 1993 to 250 last year, said Miles McEvoy, organic program specialist for the Washington Department of Agriculture. Processors grew from 16 to 58; handlers, from 28 to 44.

“The market has been growing, especially for fruit products,” he says. “And there’s some good opportunities for exporting organic frozen vegetables to Japan.”

Organically certified growers in Idaho increased from 73 in 1993, when 29,000 acres were used, to 108 growers on 35,000 acres in 1996, said Idaho Department of Agriculture official Jim Boatman. The state estimates that sales off the farm in 1996 were $1.78 million, down from $2 million two years ago.

McEvoy expects the demand for organic and natural foods to accelerate, especially as traditional grocers offer better selection.

A recent survey of 2,000 consumers conducted for the agriculture department and eight companies and universities demonstrates the potential for growth in organic and natural foods. More than half of the consumers surveyed said they wanted to buy “earth sustaining food products,” but had difficulty finding them in their favorite grocery stores.

“Those times when people bought (organic food) direct from individual farmers are probably over,” says Repp, the Endicott farmer. “There’s a real effort to make organic just like traditional food. In that sense, they’ve become successful.”

, DataTimes ILLUSTRATION: 3 Photos (2 Color)