Article

by Carey Gillam

KANSAS CITY, Mo., Jan 18 (Reuters) - Five years ago, Missouri dairy farmer Leroy Shatto was struggling to stay in business. Today, his herd has more than doubled amid a surge in demand for his product. The difference: a marketing campaign touting Shatto milk as free of artificial hormones.

Osborn, Missouri-based Shatto milk comes plain or flavored, but all comes from cows free of the genetically engineered hormone supplements that many conventional dairies give cows to to boost their milk production.

“That is what the consumers want now,” said Shatto, who runs a small family farm of 220 cows. “People are demanding this stuff not to be in their milk. If I had 100 more cows tomorrow, I still couldn’t keep caught up with demand.”

Corporate backers and consumer activists have been battling for more than a decade over whether an artificial growth hormone given to dairy cows, known as rbST or rBGH, is harmful to human and animal health.

The debate has taken a marked turn over the last several months as a growing number of dairy producers and food industry players have begun demanding rbST-free milk, citing heightened consumer demand and new niche marketing opportunities.

“We’re not making any moral judgments. It is about giving consumers what they want, and there are some consumers who simply do not want artificial growth hormones in their milk,” said Marguerite Copel, spokeswoman for Dean Foods Co. (DF.N), the nation’s largest milk processor and distributor.

Milk marketed as free of artificial growth hormones is not considered “organic” because it does not meet other criteria. But it still commands a premium price of $1.50 or more per half-gallon over conventional milk on grocery shelves.

Dean Foods has pushed producers in at least 15 U.S. markets to stop using the hormones, and similar moves are being evaluated around the country, said Copel. H.P. Hood, another major U.S. milk company, has also announced a switch.

Earlier this week, Starbucks Corp. (SBUX.O) said it was working with dairy suppliers to shift to rBGH-free milk products in its 5,500 company-owned U.S. coffeehouses.

“I don’t think it is a trend that shows any signs of abating,” said National Milk Producers Federation spokesman Chris Galen.

MULTIPLE LEVELS OF CONCERN

St. Louis-based Monsanto Co. MON.N, a leading developer of biotech crops, is the sole producer of the artificial hormone supplement, which it brands as Posilac. The supplement is produced through recombinant DNA technology, and referred to as rBGH for recombinant bovine growth hormone, or rbST for recombinant bovine somatotropin.

The company began selling FDA-approved Posilac in 1994 as a tool for boosting milk production in cows and says the milk cannot be distinguished from milk from cows that don’t receive the supplement. Suppliers who label milk as indicating there is a difference are misleading consumers, according to Monsanto.

“Farmers lose a safe, effective technology that helps them make a living and consumers pay more for the same milk,” said Monsanto spokesman Andrew Burchett.

Burchett said the company has been able to add new Posilac customers in recent months. But in a Jan. 9 filing with the U.S. Securities and Exchange Commission, Monsanto said future sales could be limited in part because of processor requests for rbST-free milk.

The changes comes as critics charge that scientific studies show excess levels of IGF-1 in rBGH milk can pose risks of breast, colon and prostate cancers. They also say the hormone supplements cause a range of health problems for dairy cows. Some countries, including Canada, have refused to approve the supplement. “There are definitely concerns about the impact on human health but people have multiple levels of concern,” said Patty Lovera, assistant director of Food and Water Watch, which is trying to eradicate use of Posilac.

Monsanto disputes evidence of health problems. “There is no scientific evidence that IGF-1 causes cancer,” said Burchett.

Back in Missouri, Leroy Shatto said he is less concerned with the make-up of the milk than in making customers happy.

“People are just loving this stuff,” said Shatto. “Business has been unbelievable since we started doing this.”