Organic Dairy Adjusting to New Supplies

August 23, 2001

Horizon Organic Holding Corporation, a producer of organic dairy products, is exploring alternatives for its company-owned farms in Idaho and Maryland. The company says expanded organic milk supplies from other sources make the decision imperative.

The decision is consistent with the company's previous statement that future milk supply will come from independent dairy producers. The company had announced its intent to sell its undeveloped farmland in California and end its herd management agreement in Colorado during the summer of 2002.

"When the company was founded in 1991, the only way it could ensure an adequate supply of organic milk was to own organic dairy farms," said Chuck Marcy, president and chief executive officer of Horizon Organic. "In 2000, the situation dramatically changed, and over the past year, more dairy farmers have recognized the economic benefits of switching to organic production. Thus, more organic milk is being produced and supply and demand is now better balanced. This provides Horizon Organic with an opportunity to focus its efforts where we bring the most value to the company -- building the Horizon Organic brand and marketing our family of products."

The company has hired McDonald Investments to assist in evaluating and pursuing options for its company-owned farms. McDonald Investments has significant experience in selling and financing agricultural assets in conjunction with long-term supply agreements. A continued supply of organic milk from the farms will be a required component of any strategic alternative the company considers.

Horizon Organic produces and markets certified organic milk and a full line of refrigerated, certified organic dairy products. The company also markets certified organic eggs and juices. Horizon Organic products can be found in conventional supermarkets and natural foods stores across the U.S. and in the U.K. For more information, please visit the Company's web site at www.horizonorganic.com.