EUGENE — In 1978, the small growers who made up the fledgling organic farming industry in the Willamette Valley were, in the words of David Lively, "knocking the hell out of each other in the marketplace."

Although they shared common values and even socialized, they didn't coordinate what they grew, creating gluts that drove down prices, said Lively, who was one of those growers. When it came to marketing their wares, he said, they were "cutthroat."

"It was a lot of very small farms all trying to do the same thing and going to the same stores," said another grower, Jack Gray of Winter Green Farm in Noti. "It didn't work to have everyone competing against each other."

So they decided to band together, founding an agricultural marketing cooperative called the Organically Grown Cooperative. Exempt from antitrust laws, the growers planned out what they would grow, made bulk purchases of seed and fertilizer, and agreed to stop undercutting one another on prices.

Nearly 30 years later, that citizen-run, nonprofit cooperative has evolved into a for-profit corporation, the Organically Grown Co., the largest distributor of organic produce in the Northwest.

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The story of Organically Grown is one of constant change, steady — and sometimes explosive — growth and a desire to stay true to its roots.

"We were challenging the system," said Lively, now the company's marketing director. "I used to say our job was feeding the 'greens.' We felt like if you wanted to eat organic you ought to be able to get it."

Still based in Eugene, the company has experienced rapid growth in recent years as organic produce has moved beyond farmer's markets and natural food stores and gone mainstream.

Customers include big supermarket chains such as Fred Meyer, natural food stores such as Whole Foods, regional chains such as Market of Choice and New Seasons, and independent natural food stores and cooperatives.

Nationally, sales of organic foods have risen from $3.6 billion in 1997 to $12 billion in 2004 — an average increase of 29 percent a year, according to the Food Marketing Institute. Fresh produce is the top-selling organic category, accounting for 37 percent of organic sales. About 51 percent of shoppers now buy organic foods.

Those trends have spurred dramatic growth for Organically Grown Co. The volume of produce it shipped has nearly doubled in the past three years, from 23 million pounds in 2003 to 50 million pounds this year, Lively said. Sales in the first eight months of 2006 increased 35 percent over the same period in 2005.

Earlier this year, the company doubled the size of its Eugene and Clackamas warehouses and added 24 employees.

The company now has 135 employees — 46 in Eugene, 82 in Clackamas, five in Kent, Wash., and two in Central Point. It has 21 grower-shareholders and 26 employee-shareholders.

The company began as an agricultural marketing cooperative, marketing only locally grown produce.

"We wanted to be farmers, but we spent all our time marketing," said Lively, one of the co-op's early members. "We'd rather be on the farm and let the marketers market." Forming the co-op allowed them to do this.

But with its warehouse space sitting empty in the winter months, members decided to start wholesaling goods from outside Oregon, Lively said.

There was one problem, however: As a grower-owned marketing cooperative, it couldn't also be a wholesale marketer. "It was illegal," Lively said. In an agriculture marketing cooperative, the majority of sellers have to be members.

In the mid-1990s, it changed its corporate structure again so that staff members and growers could be shareholders, and changed its name from Organically Grown Cooperative to Organically Grown Co.

"The market keeps evolving," Lively said. "The rules of the game have changed, but the structure has to keep looking at itself."

What hasn't changed is a desire to change culture through agriculture, as Lively puts it.

Oregon Tilth recently named the company "Outstanding Visionary of the Year" for its efforts to become more earth-friendly and to encourage the industry to collaborate on issues from global warming to social equity. It donates 2.5 percent of its net profits to organizations focused on organic agriculture and sustainability.

The company runs biodiesel in its trucks. It strives for "carbon neutrality" by reducing carbon emissions and buying carbon credits for the carbon it does emit. Every product it uses, from produce boxes to office supplies, is reusable, recyclable or can be composted. It buys its bananas from a fair-trade program in Mexico that donates money to education programs in the communities from which it draws its labor.

Even with its rapid growth, the company still has an informal, homegrown, unmistakably Eugene vibe.

Every summer, staff and growers get together for a party at a Corvallis farm, the highlight of which is a food fight with 1,000 pounds of tomatoes as ammunition.

Early one recent morning, warehouse workers navigated motorized pallet trucks from cooler to cooler in the Eugene warehouse. As they filled orders for stores and restaurants in the Eugene area, an eclectic mix of music blared over the sound system, from hard-core hip hop to an indie-rock version of the disco hit "I Will Survive" to the 1980s hit "Electric Avenue." A black-and-white campaign poster of Richard Nixon — "A Vote for Honest Government" — posted on the wall smiled over the proceedings.

Upstairs in the office, buyers and sellers in T-shirts stayed in constant contact with growers and customers, keeping close track of the ups and downs of the market. Once a week, they all get on a conference call with their counterparts in Portland to go over the state of the market: what's long, what's short, what's good, what's not.

Oranges: "Stay tight — no need to get fat — more fruit is coming."

Grapes: "Getting very pale."

Pears: "The Hosuis (Asian pears) are really good quality."

Avocados: "New Year's coming — a great time for avocados — make sure you have lots of ripe fruit."

Cabbage: "The green cabbage from Boskovich (a grower) is amazing."

It's that intimate knowledge of the market that gives Organically Grown an edge over bigger competitors, Lively said.

The market for produce represents "pure supply and demand," where nothing is stable, nothing is predictable, he said. Adding to the urgency is the hard fact that produce starts degrading as soon as it's picked. "It's a constant race," Lively said, to get it from fields to stores.

"It's alive, and it's dying," he said.

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On the Net:

Organically Grown. Co.: http:www.organicgrown.com/