By Juliet Williams
The Associated Press

LA FARGE, Wis. - It's not exactly where you'd expect to find a corporate headquarters, tucked in a tiny village 40 miles from the nearest interstate.

But a cooperative started 16 years ago by seven farmers looking for better milk prices has thrived in rural western Wisconsin. Organic Valley has grown into the nation's largest organic co-op, with sales of $156 million last year, up 25 percent from the previous year.

CEO George Siemon is in jeans and bare feet as he enthusiastically pitches Organic Valley and its milk, cheeses, butter, eggs and meats to potential clients, referring often to the co-op's farmer-centered mission statement.

"We have built a culture here to keep thinking about the farmers and the mission," said Siemon, a member of the original group that founded the co-op.

The rapid growth meant Organic Valley could give this village of 775 an even bigger boost by building its new $5.9 million environmentally friendly headquarters here. Sticking with a struggling community despite its location fits the co-op's mission, executives said.

Most employees live within a 15-mile radius, and the area would have been economically devastated if the co-op pulled out, said facilities manager Russell Dawber, who's in charge of the new 49,000-square-foot headquarters.

More than 600 farmers in 16 states are now part of the cooperative, which lets farmers decide what products to offer and how to market them.

To keep pricing stable, the co-op adds farms only when demand merits, ensuring there is always a market for existing members, dairy director Jim Wedeberg said. And they have never compromised on decent prices for milk, despite pressure from big distributors, he said.

"So many farmers retire and their buildings are deserted. We aren't seeing that in organic farming. We're seeing the next generation," he said.

The co-op's stable pricing allows farmers to plan ahead and avoid devastating market fluctuations, said Wayne Peters, a founding member and current board president.

Peters, who milks 100 cows at his Chaseburg farm, said he got into organics because he was too cheap to buy the chemicals. Now, he sees it as the future of the family farm.

"Small farmers are ideal farmers for organics. They could stay on the farm and make a decent living," Peters said. "It's a little adjustment for the younger farmers, cause they're not used to doing it without chemicals, or going without drugs for cattle."

The co-op's connection to nature is another reason to keep the headquarters in La Farge.

The barn-like building atop a hill at One Organic Way offers clear views of the lush hills of the Kickapoo Valley Reserve, an 8,000-acre wildlife preserve where a mile-long trail will be built for employees.

Inside, special windows optimize natural lighting and "keep employees in touch with the outdoors," Dawber said.

Even the cubicles are recycled, from a dot-com that went under, and the building has energy-saving appliances. The walls are stuffed with environmentally friendly cotton insulation made from used jeans.

La Farge created a special tax district to give the co-op $1.5 million for the new headquarters, which included a $750,000 grant from the Department of Commerce. The U.S. Department of Agriculture gave it a $2.8 million loan.

But despite bringing 118 more farms into the fold last year, Organic Valley remains an ant in the face of food giants eager to cash in about $9 billion a year in organic sales. Its products are likely to face increasing competition.

"We certainly expect to see some changing terrain," said Siemon, surveying a printout of Wal-Mart food sales. He said the co-op will do business with any of them but won't compromise on its mission statement or farmer prices.