Maker of organic dairy products sees deal as key to sustainability

WEST MARIN – Straus Family Creamery is sustaining its organic growth in sales of dairy products with the addition of a Petaluma family producer to its group of certified-organic milk suppliers.

The new supply contract is the third for Straus and comes as the company has been ramping up its regional marketing efforts and enjoying better sales this year.

Based in the West Marin community of Marshall, the creamery recently inked a supply contract with Emanuel and Kathy Correia of Correia Family Dairy for a portion of the milk produced from 235 cows on 135 acres northwest of Petaluma.

The Correias were one of five dairies that responded to a request for proposals, showing continued interest from North Coast farmers to become certified-organic suppliers, according to Albert Straus, president.

Organic milk production is seen as important for long-term profitability for North Coast dairies, according to Mr. Correia and Mr. Straus.

"Now we can operate in a competitive dairy market without compromising the values we cherish: preserving the land, caring for our dairy herd and providing customers with a product we can be proud of," he said.

North Coast average total dairy cost with allowances for management and return on investment in the first quarter of this year was $20.86 per hundredweight, compared with the statewide average of $15.02 for the period, according to the latest figures from the California Department of Food and Agriculture.

The Correias converted their farm to certified organic production in 2007. However, a significant change that year in federal rules for transitioning to organic brought a surplus of certified milk to market, putting pressure on organic milk prices paid to a number of farmers.

A dairyman himself with 300 head on the 660-acre family ranch, Mr. Straus has worked to adjust supply with consumer demand to keep from cutting payments to the creamery's two exclusive suppliers. Supply contracts have a quarterly addendum to adjust volume and pricing.

The creamery expanded production by signing on Tresch Family Farms with 900 cows and two dairies in Petaluma in 1996 and Hughes Family Dairy with 100 cows in Bodega a few years ago.

Starting out in 1994 as a venture to make certified-organic ice cream and other dairy products, Straus Family Creamery has become better-known among aficionados of natural foods for unhomogenized glass-bottled milk and yogurt than for ice cream and butter. The company joined the 2-year-old Non-GMO Project, a California-based nonprofit that certifies foods for being made in ways that are free from genetically modified organisms.

The economic recession slowed Straus' sales growth to single digits from double-digit increases in the previous several years, according to Mr. Straus.

Top U.S. dairy producers saw revenue slump between 2008 and 2009, according to industry data cited in the current issue of trade magazine Dairy Foods. Revenue for Wisconsin-based Organic Valley, a co-op of more than 1,600 certified-organic dairies, decreased 4.3 percent to $356 million. The largest dairy company, Dean Foods, maker of the Horizon brand, had a 7 percent decrease to $11.6 billion.

But Straus' sales this year are considerably better than those from last year, and the company has returned to grassroots marketing efforts employed when more family members were involved, according to Mr. Straus. That includes a return to farmers markets in the past few months, in-store demonstrations and booths at big natural foods events, such as the Eat Real Festival in Oakland in late August.

Straus Family Creamery employs 65 at the processing plant in Marshall and at the new Petaluma distribution facility with a "dairy bar" tasting venue. Seven work at the Straus dairy business.

For more information, call 415-663-5464 or visit www.strausfamilycreamery.com.