The Farm-to-Consumer Legal Defense Fund (FTCLDF) has hired veteran Washington, D.C. attorney, Jim Turner, to litigate an FDA Citizen Petition seeking to lift the interstate ban on raw butter for human consumption. FTCLDF and Mark McAfee, president of Organic Pastures Dairy Company (OPDC), filed the petition with the Food and Drug Administration (FDA) on July 1, 2016; to date, FDA has yet to provide a substantive response.
The Weston A. Price Foundation (WAPF) and the Communities Alliance for Responsible Eco-agriculture (CARE) are providing funding for Turner’s legal expenses. WAPF is the leading advocacy group in the U.S. for raw milk and raw milk products, including butter. CARE is a Pennsylvania-based food buyers club that has long been a strong supporter of freedom of food choice, especially raw dairy products.
Turner is no stranger to FDA, having dealt with the agency on various matters since the 1960s. His law practice consists of representing businesses, individuals, and consumer groups on regulatory issues concerning food, drug, health product safety and environmental matters.
In 1970 he was largely responsible for getting Cyclamate, an artificial sweetener, pulled off the market. For nearly ten years he fought against FDA and the G.D. Searle Corporation in an effort to take the artificial sweetener, aspartame, off the market. There have been more complaints filed with FDA about aspartame than any other food product.
Federal law requires FDA to file a response to a citizen petition within six months after receiving a copy. In December 2016 FDA sent FTCLDF and McAfee a letter stating it needed more time to review the petition; in the two years since, the agency has sent nothing to the two petitioners. If Turner can’t convince FDA to issue a substantive response to the petition, he will likely file a writ of mandamus motion in a federal district court to have the court compel FDA to respond. If FDA rejects the petition, petitioners can appeal the agency’s decision to a federal appellate court.
There has been a federal ban on raw milk and raw milk products for human consumption (other than raw cheese aged sixty days) in interstate commerce since 1987 when FDA issued a regulation (21 CFR 1240.61) establishing the ban in response to a court order. Three arguments Turner can make to lift the ban are: that FDA exceeded its authority in banning raw butter since the case resulting in the court order, Public Citizen v. Heckler, only concerned fluid milk products (milk, cream, yogurt) not manufactured milk products (butter, cheese); that federal statute (21 CFR 341) prohibits FDA from issuing a federal ‘standard of identity’ regulation for butter [standards of identity are requirements prescribing what a food product must contain to be marketed–pasteurization is one such requirement]; and that there isn’t a single foodborne illness outbreak attributed to the consumption of commercially produced raw butter [OPDC has sold over 2 million pounds of raw butter since 2001 without incident]. FDA is basically claiming that its power to regulate communicable disease allows it to ban a food that makes few, if any, sick.
The butter petition is a great opportunity to weaken the interstate raw dairy ban — a significant step towards the day when the transport of all raw dairy products across state lines will be legal. Jim Turner has the experience and ability to make that happen.
Like the rest of the country, Ohio is the in the midst of a dairy crisis that shows little sign of getting better for most farms producing raw milk for pasteurization. Yorkshire farmer, Dan Kremer who also owns and operates the Eat Food For Life buyers club, believes that family dairy farms, particularly those producing organic milk, can stay in business by producing raw milk for direct consumption. Kremer who raises beef, poultry, and eggs also distributes raw milk through a herd share agreement; his brother-in-law manages a herd of Jersey cows on the same farm.
The distribution of raw milk through herd share agreements is legal by policy in Ohio1; Kremer thinks that distribution capability is key to success and that this hinges on restoring the tradition of the milkman–the raw milkman.
In 1995, there were 6,800 dairies in Ohio; today there are about 2,000. In recent months, the average price of milk conventional farmers receive is around 30 percent (30%) below the cost of production. Dairy cooperatives are sending suicide hotline numbers along with milk checks. Organic dairies can’t compete with the certified organic mega-dairies in Texas and Colorado that are flooding the market with “organic” milk while violating federal regulation on the amount of time their herds should be out on pasture.
Kremer says, ”Many in the industry consider the disappearance of the family dairy farm as inevitable. We do not. In fact, we are convinced that this crisis event is an opportunity to strengthen the economic base of this demographic and re-establish it under its own branding.”
“To continue in dairy, the farmers will need an alternate market. We are encouraging them to consider the real or raw milk market. It would mean having direct and independent access to the public, a sufficient margin for their family’s economic viability, and the opportunity to work collaboratively with those of us they would serve to ensure the integrity and safety of their product. Most importantly, it will mean restoring the direct relationship between us and them.”
The first milkman in the U.S. was a raw milk man; home deliveries of raw milk began in Vermont in 17852,3. In the 1950s over half of the milk sales were made through home delivery; even though these sales were mostly pasteurized milk there were still home deliveries of raw milk. By 1963 29.7% of milk sales were made through home delivery4; the growth of supermarkets and other factors contributed to the decline. By 2005 only 0.4% of milk sales were made through home deliveries.5
Since 2005 home deliveries from the milkman have started to make a comeback. Distributors are delivering not only pasteurized milk but other foods such as meat, eggs and produce.
Deliveries of raw milk and raw milk products have been on the rise for a while as well but these deliveries mainly take place at a central drop-site and not door-to-door. It is the hope of Kremer that he and others will have enough demand to start home deliveries of raw milk to individual shareholders who request it.
American consumers like their convenience; door-to-door raw milk delivery fills this need and tries to give raw milk drinkers no reason not to order the product. Home delivery is becoming an increasingly important part of the overall competition for the food dollar; chains like Whole Foods are using the delivery service Instacart to drop off food orders at customers’ homes. Instacart claims it can make deliveries in as little as an hour after the customer places the order. Raw milk sales can help dairies currently producing only pasteurized milk remain in business; the easier the dairies make it for the consumer to obtain their products the better their chances of success.
Many baby boomers who grew up in the 50s and 60s nostalgically recall the milkman as someone who was part of their community or as someone who was like an extended family member. There’s no reason that can’t happen for the raw milkman; a familiar face in the neighborhood can bring on additional demand.
Kremer is starting a campaign to grow consumer demand for raw milk through increased participation in herd share programs. He hopes increased demand will encourage more dairy farmers to make the transition to producing raw milk for distribution through herd shares; bringing back a piece from our cultural past and restoring the tradition of the milkman–is part of the path to success.
The Farm-to-Consumer Legal Defense Fund (FTCLDF) has hired veteran Washington, D.C. attorney, Jim Turner, to litigate an FDA Citizen Petition seeking to lift the interstate ban on raw butter for human consumption. FTCLDF and Mark McAfee, president of Organic Pastures Dairy Company (OPDC), filed the petition with the Food and Drug Administration (FDA) on July 1, 2016; to date, FDA has yet to provide a substantive response.
The Weston A. Price Foundation (WAPF) and the Communities Alliance for Responsible Eco-agriculture (CARE) are providing funding for Turner’s legal expenses. WAPF is the leading advocacy group in the U.S. for raw milk and raw milk products, including butter. CARE is a Pennsylvania-based food buyers club that has long been a strong supporter of freedom of food choice, especially raw dairy products.
Turner is no stranger to FDA, having dealt with the agency on various matters since the 1960s. His law practice consists of representing businesses, individuals, and consumer groups on regulatory issues concerning food, drug, health product safety and environmental matters.
In 1970 he was largely responsible for getting Cyclamate, an artificial sweetener, pulled off the market. For nearly ten years he fought against FDA and the G.D. Searle Corporation in an effort to take the artificial sweetener, aspartame, off the market. There have been more complaints filed with FDA about aspartame than any other food product.
Federal law requires FDA to file a response to a citizen petition within six months after receiving a copy. In December 2016 FDA sent FTCLDF and McAfee a letter stating it needed more time to review the petition; in the two years since, the agency has sent nothing to the two petitioners. If Turner can’t convince FDA to file a substantive response to the petition, he will likely file a writ of mandamus motion in a federal district court to have the court compel FDA to respond. If FDA rejects the petition, petitioners can appeal the agency’s decision to a federal appellate court.
There has been a federal ban on raw milk and raw milk products for human consumption (other than raw cheese aged sixty days) in interstate commerce since 1987 when FDA issued a regulation (21 CFR 1240.61) establishing the ban in response to a court order. Three arguments Turner can make to lift the ban are: that FDA exceeded its authority in banning raw butter since the case resulting in the court order, Public Citizen v. Heckler, only concerned fluid milk products (milk, cream, yogurt) not manufactured milk products (butter, cheese); that federal statute (21 CFR 341) prohibits FDA from issuing a federal ‘standard of identity’ regulation for butter [standards of identity are requirements prescribing what a food product must contain to be marketed–pasteurization is one such requirement]; and that there isn’t a single foodborne illness outbreak attributed to the consumption of commercially produced raw butter [OPDC has sold over 2 million pounds of raw butter since 2001 without incident]. FDA is basically claiming that its power to regulate communicable disease allows it to regulate a food that makes few, if any, sick.
The butter petition is a great opportunity to weaken the interstate raw dairy ban — a significant step towards the day when the transport of all raw dairy products across state lines will be legal. Jim Turner has the experience and ability to make that happen.
The New Jersey Department of Agriculture (NJDA) held a statewide Dairy Summit on October 11 to show the state’s dairies ways to survive the current crisis the industry is going through. The event was great testimony to how unfair the commodity pricing system, the Federal Milk Marketing Order (FMMO), is and how legalization of raw milk sales and/or distribution in the state can help dairy farms remain in business. In the mid-1970s there were over 500 dairy farms operating in New Jersey, today there are 48.
Earlier this year the state’s Grade A dairies were receiving around $14 per hundredweight (one hundred pounds of milk), that figure shrunk to $12 after deducting transportation costs (moving the milk from the farm to the processing plant of the farmer’s dairy cooperative). According to one of the speakers at the summit, the average cost of production for the dairies is $18.50, a path to bankruptcy.
Dairy farmers know the FMMO pricing system robs them of revenues they should be earning but the pricing is complicated enough so that it is difficult to figure out exactly how the FMMO denies them income that should rightly be theirs. Most dairy farmers are captive to the FMMO and the commodity pricing system; they belong to a cooperative which bottles and markets their milk. In that situation, individual farmers do not set their own price.
Four ways a dairy farmer can escape or survive the commodity system are:
Own bottling and pasteurization equipment; this is a major expense most dairy farmers cannot afford.
Find a creamery willing to bottle and pasteurize an individual farmer’s milk, something that’s not easy to do. Jared Weeks, a dairy farmer from Ringoes, who spoke at the summit, has been able to find a creamery in Pennsylvania to take some of his milk for bottling and pasteurization, but few, if any, other dairy farmers in the state have been able to make the same arrangement.
Make value-added dairy products, such as butter, cream, and yogurt; again, this is typically a substantial expense most dairy farmers cannot afford.
Sell or distribute raw milk for direct consumption – this is a less expensive way to escape or survive the commodity system whether the farmer is selling direct to the consumer, distributing direct to the consumer through a herd share agreement or selling to retail stores.
New Jersey is one of seven remaining states that do not allow any raw milk sales or distribution. Legislators began introducing raw milk bills in the New Jersey General Assembly back in 2006; since that time New Jersey has lost more than half of its remaining dairies.
The New Jersey Department of Agriculture is not opposed to legislation legalizing raw milk sales and/or distribution; it is the New Jersey Department of Health (NJDOH) that opposes raw milk legalization. The health department sees raw milk as a health threat but a recent Canadian study found, “The rate of unpasteurized milk-associated outbreaks [in the U.S.] has been declining since 2010. Controlling for growth in population and consumption, the outbreak rate has effectively decreased by 74% since 2005.” According to the Centers for Disease Control from 1998-2016, there were only seven (7) foodborne illness outbreaks attributed to the consumption of raw goat milk, an average of about one outbreak every three years.
Raw milk sales or distribution was not on the agenda for the Dairy Summit. The focus was on individual dairy farmers having access to or building a processing plant that would bottle and pasteurize milk as well as manufacture value-added dairy products. Jon McConaughy, the owner of Double Brook Farm in Hopewell, estimated that it would cost $450,000 to build a processing plant. Daniel Wunderlich, Dairy Program Coordinator for NJDA spoke about having a group processing plant that would bottle both conventional and organic milk. McConaughy said, at this time the New Jersey General Assembly had not allocated any money towards such a project. There were speakers for various agencies of USDA and other organizations who spoke about loans to farmers for marketing and dairy processing plants and equipment but how can farmers qualify for a loan when they are already deeply in debt and are losing money with every shipment of milk they make to their cooperative. Dairy farmers need a decent price for their milk more than they need a loan.
Even though the FMMO wasn’t a topic at the Dairy Summit, the information speakers presented was still an indictment of the commodity milk pricing system.
Tom Beaver, Director of Marketing and Development for NJDA said that New Jersey dairies produce one percent (1%) of the milk New Jersey residents consume. NJDA has established a Jersey Fresh logo that in-state producers of milk and other foods can put on their labels to promote their products. If it looks like the state is down to 48 Grade A dairies because New Jersey consumers don’t want to purchase milk produced in-state, that is not so.
Beaver said that NJDA recently conducted a Jersey Fresh Milk Consumer Survey throughout New Jersey and all five boroughs of New York City; 85% of those responding to the survey “indicated an interest in buying Jersey Fresh milk; 23% of those surveyed would be willing to pay a premium, with the average premium being $1.74 above what respondents are currently paying for a half gallon.” What is wrong with this picture?
Dairy farmer Pete Southway, owner of Springhouse Creamery in Sussex County, said that the fifty cows he milks only provide 7% of the milk residents of his county need. McConaughy estimated that producers free from the commodity system and the milk cooperatives could take in as much as $104 per hundredweight (about $9 per gallon). The demand for local milk is there, it’s not the lack of consumer demand as much as the commodity pricing system that are driving dairies out of business.
Retired dairy farmer John Pugh attended the summit. Pugh, who is 97 years young, recalled how once the FMMO went into effect that he switched his herd from Guernseys to Holsteins, placing greater emphasis on the quantity of milk production and less on quality. Legalizing raw milk sales and distribution in New Jersey is a way to put more quality milk on the market and to revive the dairy business in the state that the FMMO helped destroy.
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Earlier this year the North Carolina legislature passed a bill containing a provision that ended a 14-year ban on herd share agreements in the state. Herd share agreements are private contractual arrangements in which someone purchases an ownership interest in a dairy animal (or herd of dairy animals) and pays a fee to a farmer for boarding, caring for, and milking the animal(s). The herd share law went into effect on October 1. With the new law, only two states remain that have expressly banned herd shares by either statute or regulation: Maryland and Nevada.
Session Law 2018-113, also known as the North Carolina Farm Act of 2018, contains a clause stating, “nothing…shall prohibit the dispensing of raw milk or raw milk products for personal use or consumption to, or the acquisition of raw milk or raw milk products for personal use or consumption by, an independent or partial owner of a cow, goat, or other lactating animal.”1
The new herd share law marks the continued move away from earlier attempts to ban raw milk distribution in the state. The sale of raw milk for human consumption has long been illegal in North Carolina. In 2004 an official from the state Department of Environment and Natural Resources was able to successfully engineer a stealth bill banning herd shares through to passage in the final hours of the legislative session. Sales of raw pet milk were still legal at the time but the state Department of Agriculture attempted, in 2008, through rulemaking to require all pet milk to be denatured before sale. Opponents led by then Weston A. Price Foundation (WAPF) chapter leader, Ruth Ann Foster, were not only successful in defeating the proposed rule but were able to pass a bill in 2009 that legalized the unlicensed sale of raw pet milk.
North Carolina is the second state to pass raw milk legislation this year; in March, Utah enacted a law allowing the delivery of raw milk by licensed producers and the on-farm sales by unlicensed producers on a limited basis. With the crisis the conventional dairy industry is going through, there will be more opportunity to increase raw milk access around the country; raw milk is a way to survive or escape the commodity system that is throwing so many dairy farmers out of business.
The founding fathers saw the separation of powers among the legislative (making laws), executive (enforcing laws) and judicial(interpreting laws) branches as a bedrock of our constitutional republic, but what passes for the separation of powers under our current system of government has little resemblance to what our founding fathers intended, especially when a governor is directly introducing legislation.
On August 9 Governor Charles Baker amended a provision in an appropriations bill that would have expanded raw milk access for consumers and better enabled raw milk producers to make a living. Currently only the licensed on-farm sale of raw milk is legal in Massachusetts; House Bill 4835 (H.4835) would have allowed licensed raw milk farmers to:
deliver raw milk directly to a consumer, off-site from the farm if the raw milk farmer has a direct contractual relationship with the consumer;
contract with a third party for the delivery of raw milk off the farm to a consumer;
deliver raw milk through a CSA (community-supported agriculture) delivery system;
make deliveries to the consumer’s residence or to a pre-established receiving site so long as the site was not in a “retail setting”. Raw milk producers, however, could make deliveries in a retail setting through a CSA delivery system provided that the raw milk met the stipulation that it “shall be kept separate from retail items for sale and shall not be accessible to the public.”
sell raw milk from the farmer’s farm stand even if the stand is “not contiguous” to the farmer’s raw milk dairy. Current law requires the farm stand to be on the same property where the raw milk dairy is located.
H.4835 had a labeling requirement for raw milk being sold or delivered to consumers off-farm and the bill gave the state department of agricultural resources and the state department of public health joint responsibility to issue regulations governing the handling, packaging, storage and testing , and transportation of raw milk.1
The amendment Governor Baker sent back to the legislature for consideration as House Bill 4884 (H.4884) mentioned none of the benefits of H.4835 except for the sale of raw milk at a farm stand off-site from the dairy farm.
The summary to H.4884 reads:
An act, a message from His Excellency the Governor returning with his disapproval of a certain section, and also with recommendations of amendments of certain sections contained in the engrossed Bill promoting climate change adaptation, environmental and natural resource protection, and investment in recreational assets and opportunity [see House, No. 4835]. August 9, 2018.
H.4884 states, in part, that “the commissioner of public health, shall, … adopt and promulgate rules and regulations to reduce the risk of milk-borne illness associated with the consumption of unpasteurized milk that is sold off-site of the farm at which such milk was produced. Such rules and regulations may include, but shall not be limited to, the sanitary and operational standards for the transportation, receiving, handling, storage, processing, packaging, labeling and sale of milk intended for human consumption prior to pasteurization. … Such regulations shall allow the sale of milk intended for human consumption prior to pasteurization at a farm stand owned or operated by the producer of said milk that is not on the site of the farm at which the milk was produced.”
Given the bias of the public health department against raw milk, it’s unlikely that any of the other benefits provided in H.4835 would be included in a regulation. H.4884 also requires raw milk producers selling at an off-site farm stand to obtain an additional license from the department of public health.2
Governor Baker based his authority to amend the raw milk section of H.4835 on a provision in the Massachusetts Constitution that states, in part, “the governor may disapprove or reduce items or parts of items in any bill appropriating money… As to each item disapproved or reduced, he shall transmit to the house in which the bill originated his reason for such disapproval or reduction, and the procedure shall then be the same as in the case of a bill disapproved as a whole.”3
There is nothing in the state constitution that says that the governor can amend the substantive language in a bill, but the way the executive branch of government has gotten out of control these days at both the federal and state levels in exceeding its powers with little resistance from either the legislative or judicial branch, there’s little reason to believe Governor Baker won’t get away with his violation of the Massachusetts Constitution.
Even if H.4884 is lawful, it’s a poor decision from a policy standpoint. The state’s licensed raw milk producers have an excellent track record of safety with few, if any, foodborne illness outbreaks attributed to the consumption of raw milk in Massachusetts. H.4835 was a way to help raw milk producers—at little or no risk to the public—which is especially important given the current crisis the dairy industry is in today. In 1997 there were 353 dairy farms in Massachusetts; at the end of 2017, there were 135.4
Instead of helping Massachusetts dairy farmers the way he had a chance to, Governor Baker bought into the fear-mongering on the “dangers” of raw milk fed him by his department of public health. The nanny administrative state marches on.
H.4884 has been referred to the House Ways and Means Committee.
After two consecutive legislative sessions in which unsuccessful efforts were made that would have either banned or severely restricted herd share agreements, the Virginia Department of Agriculture and Consumer Services (VDACS) has clarified its policy on herd shares. In an email to the Farm-to-Consumer Legal Defense Fund (FTCLDF), a VDACS official stated, “The agency has currently taken a hands off approach to herd shares as long as there is a legitimate contractual relationship conveying ownership between the consuming individual and the animal/herd. Value added products such as yogurt, etc. (again in the context of a contractual relationship between owner and consumer) are still on the table and I’m not sure where we are going with that but the agency is not taking any action regarding those types of products at this time.”1
Herd share agreements are private contractual arrangements in which someone purchases an ownership interest in a dairy animal (or herd of dairy animals) and pays a fee to a farmer for boarding, caring for and milking the animal(s). The owner has the property right to obtain raw milk from the animal(s). It’s legal to purchase ownership in a dairy animal and it’s legal to obtain milk from a dairy animal you co-own; currently, there is nothing in the Virginia Code on herd shares. Herd share programs have been thriving in Virginia for many years.
In 2017 an amendment to a food freedom bill was introduced that would have banned herd shares; the inducement for the ban was the legalization of the regulated on-farm sale of raw milk. The Virginia Independent Consumers and Farmers Association (VICFA) and others–including the bill’s original sponsor, Nick Freitas–was successful in killing the legislation.
In 2018 opponents of herd shares–such as Virginia Farm Bureau, Virginia Agribusiness Council, and the Virginia State Dairymen’s Association–took a different tact; supporting the introduction of legislation in the Senate (SB 962) and the House of Delegates (HB 825) that would have officially legalized herd shares while attempting to intimidate both consumers and farmers from either entering into or continuing on with herd share agreements. Both bills required that shareholders assume joint liability if the herd or any milk produced by the herd was responsible for injury or illness; the way both bills read, giving raw milk to family or guests would be a crime. Both bills provided that violating any of the requirements in them would be first degree misdemeanors with criminal penalties of up to one year in jail and $2,500 in fines; everyday the violation continued would be a separate offense. Strong grassroots mobilization led by VICFA with help from the Weston A. Price Foundation (WAPF), FTCLDF and other organizations, carried the day; both bills died in committee.2
VDACS has long had a hands-off policy towards regulating herd share agreements but there have been reports of agency inspectors telling farmers that herd share agreements are illegal. Having a statement in writing from VDACS should help increase the sizable number of herd share programs in the state that already exist. The position of VICFA and its members has always been that the state has no jurisdiction over property rights in dairy livestock acquired through private contract, but there are others who were more hesitant to enter into herd share agreements without something in writing from VDACS on herd shares; they now have it.
In the past VDACS has been reluctant to acknowledge the legality of value-added products distributed through a herd share agreement, but recent precedent in other states shows the wisdom of VDACS current hands-off policy towards the distribution of raw dairy products other than milk.
In 2016 a Michigan court found a herd share operation not guilty of contempt for distributing butter and cream, among other product, to its shareholders; there was an injunction against the operation prohibiting it from violating Michigan’s dairy laws. The Michigan Department of Agriculture and Rural Development (MDARD) had adopted a written policy allowing only the distribution of fluid raw milk through herd share agreements; in spite of the policy and plenty of evidence showing that other raw dairy was distributed through the herd share, the judge ruled that MDARD had not made its case that there were any violations of the state dairy laws. The case turned in favor of the herd share operation when one of its shareholders, Mike Lobsinger, successfully intervened as a party to the contempt proceeding. One of the arguments made by Lobsinger’s attorney was that, with the raw milk being his property, it was none of MDARD’s business if he had that milk processed into cream.3,4
In 2012 the Office of the Tennessee Attorney General issued an opinion finding that an “independent or partial owner of any hoofed mammal” may use a dairy product made from the milk produced by such animal for the owner’s personal consumption or other personal use.”5 Tennessee has a herd share statute recognizing that anyone who has an ownership interest in a dairy animal can use “the milk from such animal for the owner’s personal consumption or other personal use.”6 When the Tennessee Department of Agriculture claimed that the statute only allowed the distribution of raw milk and no other dairy product, State Senator Frank Niceley, the sponsor of the herd share bill that passed into law in Tennessee, sought the attorney general opinion.
Herd share programs are at the heart of Virginia’s local food system; the written statement of policy from VDACS should only strengthen that. Hopefully, it will help convince herd share opponents not to introduce legislation again in the next legislative session; if they do, the grassroots will be there once more to contest them.
[1] Email dated August 7, 2018
[2] Pete Kennedy, “Victory in Virginia – Bills Threatening Herd Shares Now Dead”, RealMilk.com, 6 February 2018. Last viewed 9/12/18 at https://www.realmilk.com/victory-virginia-bills-threatening-herd-shares-now-dead/
[3] Pete Kennedy, “Wild Day in Michigan: A Court Victory and A Raid”, Farm-to-Consumer Legal Defense Fund website, 13 December 2016. Last viewed 9/12/18 at https://www.farmtoconsumer.org/blog/2016/12/13/wild-day-michigan-court-victory-raid/
[4] James S. Jamo, “Opinion and Order”, MDARD v Hill High Dairy, LLC et al, File No. 15-574-CZ, 8 December 2016. [view PDF]
[5] Robert E. Cooper, Jr., “Owner’s Use of Milk and Licensing of the Sale of Eggs”, State of Tennessee Attorney General Office, Opinion No. 12-04, 13 January 2012
[6] Tennessee Statute 53-3-119
Starting September 17, 2018, all “very small business“ (roughly defined as business with less than $1 million in annual sales1) manufacturing, processing2 or holding food must be in compliance with applicable federal regulations issued pursuant to the FDA Food Safety Modernization Act (FSMA) that govern “Current Good Manufacturing Practices, Hazard Analysis and Risk-Based Preventive Controls for Human Food.”3 These regulations break down into two different requirements: first, that the food business be in compliance with current good manufacturing practices (CGMPs) and, second, that it develop and implement a food safety plan that effectively performs a hazard analysis and designs risk-based preventive controls for human food (HARPC, Hazard Analysis and Risk-based Preventive Controls).4
The way FDA is interpreting these regulations, many local food producers will be under FDA‘s jurisdiction and subject to inspection by the agency, possibly even including a home kitchen producing cottage foods. The biggest potential problem for local food producers is not going to be the HARPC requirements but rather the CGMP mandate.
HARPC–Who Is Exempt?
HARPC does not apply to any business manufacturing, processing, packing or holding food that is not required to register with FDA as a “food facility.” There are a number of exemptions from the registration requirements; the exemption most applicable to local food producers would be the one for “farms” and “retail food establishments.“5
“Farm” is defined, in part, as “an operation under one management in one general physical location devoted to the growing of crops, the harvesting of crops, the raising of animals (including seafood) or any combination of these activities.6 The term “farm“ also includes “packaging and labeling raw agricultural commodities when these activities do not involve additional manufacturing/processing. Farmers growing/raising and selling raw milk, eggs, raw honey7, whole fruits and vegetables8, meat from amenable species (cattle, hogs, sheep, goats and poultry)9 or any combination of the above foods would qualify as a farm and be exempt from the registration requirement. The farmer/producer selling any processed fruits and vegetables (with one exception)10, any products processed from raw milk, maple syrup11 or any meats from non-amenable species (e.g., rabbit, bison, deer, elk)12 would result in the loss of the “farm“ exemption from registration.
If the farm business doesn’t qualify as a “farm“, it can still be exempt from the registration requirement if it qualifies as a retail food establishment. A business qualifies as a retail food establishment if over half of the “annual monetary value of its sales of food products are direct to consumers.13 This would include sales of all food products sold by the farmer/artisan not just food products that the business produced.
For those not aware of the “farm” or “retail food establishment” exemption who have registered with FDA, it is recommended—if your business qualifies as a farm or retail food establishment—that you contact FDA and request that it cancel your registration. If FDA independently verifies that your business is not required to register, it will cancel your registration.14
Those registering with FDA as a food facility with less than $1 million in annual sales are eligible for a “qualified facility” exemption from the HARPC requirement.15 To obtain the exemption, eligible facilities must submit form FDA 3942a to the agency by December 17, 2018 (those facilities starting up their business after September 17, 2018, must submit the same form before beginning operations).16 According to FDA’s Outreach Info Center, form 3942a will be available September 19; currently, only a draft version of the form is in circulation.
On the form, those seeking the exemption must attest that they are a qualified facility17 (e.g., a “very small business“) and either that they “have identified the potential hazards associated with the food being produced, are implementing preventative controls to address the hazards, and are monitoring the performance of the preventative controls to ensure that such controls are effective“18 or that they are in compliance with state or other applicable non-federal laws and include evidence of regulatory oversight19 (e.g., licenses, permits). Beginning in 2020, those seeking the exemption must submit form 3942a every two years.20 Under certain circumstances, FDA can revoke the qualified facility exemption.21
CGMPs
The CGMP requirements are where FDA will directly regulate local food producers. FDA has been low-key about to whom it will apply the CGMP requirements22, but a read of the regulations indicates that FDA can apply them to local food. Unlike the HARPC requirement, small farms and local artisan producers will have no exemption from the CGMP mandate based on their revenues. Among those exempt from the CGMP are: producers exclusively under USDA jurisdiction (e.g., producing and selling only beef, pork, lamb, goat and poultry products); and farms meeting the “farm” definition discussed above. It appears all, or nearly all, other local food producers will be subject to the CGMPs. According to FDA, the CGMP requirements apply even to businesses operating only in intrastate commerce.23
CGMPs are a one-size-fits-all regulatory scheme–easily subject to varying interpretation by inspectors–that contain requirements for personnel24, plants and grounds25, sanitary operations26, sanitary facilities and controls27, equipment and utensils28, processes and controls29, warehousing and distribution30, holding and distributing distribution of human food by-products for use as animal food31, and the defect action levels32. These are requirements that state legislatures should be determining but FDA wants to regulate as much food and as many food producers as possible. Value-added products are where the money is; FDA wants to have jurisdiction over all of these products, no matter how small the food producer is.
The FDA Bootstrap
As far as is known, Congress never brought up CGMPs when the Food Safety Modernization Act was under consideration but FDA took advantage of the broad power the Act gave it to issue regulations and bootstrapped the CGMP requirements into FSMA. FDA had long contended that FDA could regulate intrastate food commerce under powers granted it by the Public Health Service Act (PHSA) to regulate communicable disease; it wasn’t until FSMA became law that the agency had the traction to do so (the CGMPs had their own Part in the Code of Federal Regulations, 21 CFR 110; FDA used FSMA to insert the CGMPs into Part 117 and 21 CFR 110 will be repealed on September 17, 2018).
The PHSA provides that:
“The Surgeon General, with the approval of the Secretary [of Health and Human Services] is authorized to make and enforce such regulations as are necessary to prevent the introduction, transmission, or spread of communicable disease from foreign countries into the states or possessions, or from one state or position into any other state or possession. For the purposes of carrying out and enforcing such regulations the Surgeon General may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, distraction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.”33
That this power authorizes FDA to inspect home kitchens making cottage foods is definitely a reach. There is nothing in the PHSA or in its legislative history indicating FDA has the authority to inspect an intrastate food business when there is no credible evidence that the business is producing food under unsanitary conditions or is responsible for a foodborne illness outbreak. FDA has claimed that “due to the nationwide interrelated structure of the food industry, communicable disease may, without proper intrastate food controls, easily spread interstate.“34 That statement describes the industrial food system, not the local food system. FDA should recognize the difference between the two and leave the latter alone.
In addition to being beyond its power, enforcing the CGMPs against local food is a waste of resources if FSMA is about improving food safety. Instead of spending whatever money FDA intended to budget towards inspections of intrastate food producers, why doesn’t FDA put its resources towards areas of the food sector where there are actually food safety problems, like imported food?
There are built-in incentives for small farmers and local artisans to produce safe food; those producers are feeding the same food to their families, one product recall can put them out of business, one case of foodborne illness can put them out of business. Legislatures in nearly all states have recognized this with the passage of cottage food bills that allow the direct-from-producer-to-consumer sale of a variety of foods with little or no regulation. Four states have passed food freedom bills and other legislation that allow the unregulated sale from producer to consumer of nearly all foods other than meat. There have been few, if any, cases of foodborne illness attributed to producers operating under cottage food or food freedom laws.
Will FDA actually inspect private home kitchens to make sure that the kitchens are in compliance with applicable CGMP requirements? If there were inspections, they would likely be conducted by state agencies pursuant to a cooperative agreement with FDA. So, state legislators who voted on behalf of their constituents who want to deregulate local food transactions between consumers and producers are now being told by FDA that the same state agencies that the legislators didn’t want inspecting local food producers will now be inspecting them; this even though there is little or no evidence that Congress wanted FDA to inspect these same producers for compliance with CGMPs.
FDA might not have the resources to carry out widespread inspections of local food producers, but the threat is that FDA can create a chilling effect on local food production with a small number of inspections of small farms and cottage food operations; convincing some local food producers to get out of business while deterring others from starting up operations.
There are ways to fight against FDA’s attempt to regulate all local food production. For starters, having Congress deny FDA funding to conduct inspections of those in the food business who are not required to register with the agency as a food facility. State legislatures could also require that any FSMA cooperative agreements between state agencies and FDA exclude in the agreement inspections of businesses not required to register as food facilities. Congress could also amend FSMA to clarify that those not required to register as a food facility be exempt from the CGMP requirements. Those processing, manufacturing, packing or holding food for animal consumption not required to register with FDA don’t have to comply with the CGMP mandate35; FDA can apply the same standards to human food.
An immediate move FDA can make is to include additional kinds of manufacturing/processing under the definition of “farm”, enabling farmers to produce more value-added products while still remaining under the “farm” exemption. The agency is currently in the process of amending that definition.36
The more local food producers there are the safer food will be in this country; applying the CGMPs to small farmers and local artisan producers is a big step in the wrong direction.
Those with questions about food facility registration or exemptions from the HARPC and CGMP requirements can email Pete Kennedy at pete@realmilk.com.
—————– FOOTNOTES
[1] The exact definition of “very small business” in 21 CFR 117.3 reads:
Very small business means, for purposes of this part, a business (including any subsidiaries and affiliates) averaging less than $1,000,000, adjusted for inflation, per year, during the 3-year period preceding the applicable calendar year in sales of human food plus the market value of human food manufactured, processed, packed, or held without sale (e.g., held for a fee). [bolded emphasis added]
[2] The definition of manufacturing/processing is extremely broad; 21 CFR 1.227 and 21 CFR 117.3 state the same definition:
Manufacturing/processing means making food from one or more ingredients, or synthesizing, preparing, treating, modifying or manipulating food, including food crops or ingredients. Examples of manufacturing/processing activities include: Baking, boiling, bottling, canning, cooking, cooling, cutting, distilling, drying/dehydrating raw agricultural commodities to create a distinct commodity (such as drying/dehydrating grapes to produce raisins), evaporating, eviscerating, extracting juice, formulating, freezing, grinding, homogenizing, irradiating, labeling, milling, mixing, packaging (including modified atmosphere packaging), pasteurizing, peeling, rendering, treating to manipulate ripening, trimming, washing, or waxing. For farms and farm mixed-type facilities, manufacturing/processing does not include activities that are part of harvesting, packing, or holding. [bolded emphasis added]
[3] 21 CFR Part 117
[4] The deadline for compliance with the CGMP and HARPC requirements is September 17, 2018, for those very small businesses that manufacture, process, pack and/or hold animal food. “Very small business”, in the case of animal food, is roughly defined as those businesses with under $2.5 million in annual sales. See 21 CFR 507.3 and 21 CFR 507.5
[5] 21 USC 350d(c)(1), 21 CFR 1.226(b) and (c)
[6] 21 CFR 1.227
[7] FDA, Questions and Answers Regarding Food Facility Registration (Seventh Edition): Guidance for Industry, August 2018, pp. 10-11. Last viewed 8/30/18 at https://www.fda.gov/downloads/Food/GuidanceRegulation/UCM332460.pdf
[8] Farms growing and selling vegetables could be subject to FSMA’s produce safety standards depending on their income levels and whether the vegetables are usually cooked before being consumed. See 21 CFR 112.1-112.5
[9] Meat from amenable species is not considered a raw agricultural commodity but, since it is under USDA’s jurisdiction, a farmer selling meat from amenable species the farmer raised would not cause the loss of “farm” status.
[10] “Drying/dehydrating raw agricultural commodities to create a distinct commodity (such as drying/dehydrating grapes to produce raisins), and packaging and labeling such commodities, without additional manufacturing/processing….” — from definition of “farm”, 21 CFR 1.227
[11] FDA, Questions and Answers Regarding Food Facility Registration (Seventh Edition): Guidance for Industry, August 2018, p. 9. Last viewed 8/30/18 at https://www.fda.gov/downloads/Food/GuidanceRegulation/UCM332460.pdf
[12] Ibid., p. 21
[13] 21 CFR 1.227
[14] 21 CFR 1.241(c)
[15] 21 CFR 117.3 contains definitions and 21 CFR 117.5 gives greater detail about exemptions.
Qualified facility means (when including the sales by any subsidiary; affiliate; or subsidiaries or affiliates, collectively, of any entity of which the facility is a subsidiary or affiliate) a facility that is a very small business as defined in this part, or a facility to which both of the following apply:
(1) During the 3-year period preceding the applicable calendar year, the average annual monetary value of the food manufactured, processed, packed or held at such facility that is sold directly to qualified end-users (as defined in this part) during such period exceeded the average annual monetary value of the food sold by such facility to all other purchasers; and(2) The average annual monetary value of all food sold during the 3-year period preceding the applicable calendar year was less than $500,000, adjusted for inflation. Qualified facility exemption means an exemption applicable to a qualified facility under § 117.5(a). [21 CFR 117.3, bolded emphasis added]
[16] 21 CFR 117.201(c)(2)(i)(A)(b)
[17] Applicants for the exemption must have financial records from 2016-2018 to show that they are a “very small business” as defined in 21 CFR 117.3
[18] 21 CFR 117.201(a)(2)(i)
[19] 21 CFR 117.201(a)(2)(ii)
[20] 21 CFR 117.201(c)(2)(i)(C)(ii)
[21] 21 CFR 117.251
[22] FDA states on its website, “It is important to note that applicability of the CGMPs is not dependent on whether a facility is required to register.” See “FSMA Final Rule for Preventive Controls for Human Food” webpage. Last viewed 8/30/18 at https://www.fda.gov/food/guidanceregulation/fsma/ucm334115.htm
[23] 78 FR 3646, 3651
[24] 21 CFR 117.10 – employee cleanliness and disease control
[25] 21 CFR 117.20 – plant construction, condition of the grounds
[26] 21 CFR 117.35 – general maintenance, cleaning food and non-food contact surfaces, storage of equipment and utensils
[27] 21 CFR 117.37 – water supply, plumbing, sewage disposal, toilet facilities, handwashing facilities, garbage disposal
[28] 21 CFR 117.40 – equipment design requirements
[29] 21 CFR 117.80 – operational requirements for food manufacturing, and food and ingredient storage
[30] 21 CFR 117.93 – sanitary requirements for storage and transportation of food
[31] 21 CFR 117.95 – includes requirements on containers, equipment, and labeling food by-products
[32] 21 CFR 117.110 – Defect action levels. Per 21 CFR 117.3, “Defect action level means a level of a non-hazardous, naturally occurring, unavoidable defect at which FDA may regard a food product ‘adulterated’ and subject to enforcement action under section 402(a)(3) of the Federal Food, Drug, and Cosmetic Act.” [bolded emphasis added]
[33] 42 USC 264(a)
[34] 78 FR 3646, 3651 citing 44 FR 23238 at 33239
[35] 21 CFR 507.5(a)
[36] Letter from FDA Commissioner Gottlieb, July 31, 2018. Last viewed 8/30/18 at https://www.fda.gov/downloads/Food/GuidanceRegulation/FSMA/UCM615393.pdf
A public hearing was held at the Fire Hall in Lairdsville, Pennsylvania, on July 24 to voice concern over the current financial crisis facing dairy farm families throughout America–aptly termed, the economic “Dairy Depression”. Organized by Farm Women United (FWU), the event called for similar hearings to be held across the countryside to gather testimonies that “Congress itself should be gathering but refuses to do so in what is the most outrageous and blatant example of dereliction of duty by federal legislators in modern American agricultural history that is patently undermining the Constitutional rights of American family dairy farmers.” The plea is for Congress and the current Administration to intervene with a “$20 Emergency Floor Price” for milk and mandatory federal hearings to investigate and resolve the crisis.
Gerald Carlin has authorized his written testimony to be published on RealMilk.com (reproduced here by permission with minor formatting and punctuation edits). In his closing, Gerald addresses the many politicians who have failed to respond to the dairy crisis, to whom he says, “Your silence and excuses are deafening and damning.”
Testimony for the Dairy Farm Family Crisis Hearing, Lairdsville, PA
July 18, 2018
I want to thank everyone for taking time out of your busy schedules to attend this important hearing. I also want to thank my wife Tina for all of her hard work in helping to organize this hearing.
My name is Gerald Carlin. My wife Tina and I are former dairy farmers and are now raising beef cattle and vegetables on our century farm in Susquehanna County, PA.
I was asked to speak today on some of the history of events leading to this dreadful state of affairs in the dairy farming business and farming in general. The list of events is too long to cover, but I will mention some of the important ones.
In the period following the Civil War, a number of industries became monopolized including: Railroads by Vanderbilt, Oil by Rockefeller, Steel by Carnegie, and there were efforts by some to take control of agriculture. The Sherman Anti-trust Act of 1890 made monopolizing trade a felony and gave the Attorney General and US Attorneys the responsibility to prosecute those who monopolize, attempt to monopolize, or conspire with others to monopolize trade among the several states. Enforcement of Anti-trust has been lacking at best.
Farm owners are not allowed to unionize but in 1922 Congress passed the Capper-Volstead Act which enabled farmers to form marketing cooperatives to market their products as a group and to bargain for fair prices. The farmer-owned co-ops were granted special protections. As cooperatives have merged and morphed into giant corporations–distant, detached, and unaccountable to their farmer-owner members–these giant co-ops now hide behind their protections granted to them by the Capper-Volstead Act, while they abuse their farmer-owner members with immunity.
In 1937, Congress passed the Agricultural Marketing Agreement Act (AMAA) which established the Federal Milk Marketing Orders (FMMO) that created equal pay for farmers through pooling within the orders to create a uniform price for milk regardless as to how the milk was used. The provision in 7 U.S.C. Section 608 (c) 18 of the 1937 AMAA mandated that the Secretary of Agriculture consider regional production costs in the raw milk pricing formula. FMMOs still exist as a result of the 1937 AMAA but the “cost of production” part has been ignored and scorned for the last 37 years.
In July 1962, the Committee for Economic Development (CED)–made up of some 200 corporate executives, economists and other distinguished experts (not one farmer)–released An Adaptive Program for Agriculture with a stated goal of reducing the farming population by one third within five years. The report complained about wasted resources in farming, particularly labor, as technology increased productivity in agriculture and the large public expenditures for vocational training for young farmers in public schools. They proposed a policy of actively discouraging young people from getting into farming as well as actively trying to coax existing farmers to exit agriculture and even proposed public funds be spent to assist farmers in moving expenses to relocate their families off of the farm.
Kenneth E. Boulding, Ag Economist with the Department of Economics at the University of Michigan and member of the research advisory board for the CED, stated the following:
The only way I know to get toothpaste out of a tube is to squeeze, and the only way to get people out of agriculture is likewise to squeeze agriculture. If the toothpaste is thin, you don’t squeeze very hard, on the other hand, if the toothpaste is thick, you have to put real pressure on it. If you can’t get people out of agriculture easily, you are going to have to do farmers severe injustice in order to solve the problem of allocation.
Although this quote does not appear in the text of An Adaptive Program for Agriculture, the sentiment is still evident. The sentiment expressed by these distinguished experts was that farmers were merely disposable pawns in an economic plan. If the inefficient farmers would just leave farming, the farmers who are left will prosper. Efficient farmers will produce food more cheaply, people will spend less money for food, leaving more disposable income to spend on consumer goods, which will cause economic growth and increase income for all, or so the theory goes. Of course, consumer food prices have continued to rise even as farmers get less and less of the retail dollar. I guess there is a fly in the ointment somewhere.
There were 1.1 million farms with dairy cows in the United States in 1964, 600,000 in 1969, and some 40,000 today; so those who are left are really prospering, right? Oh wait, they are struggling more than ever before. Obviously there are still too many. You get the point.
The official belief that there are too many farmers has grown and become entrenched in public policy evidencing itself in numerous ways, not the least of which are burdensome and senseless regulations on many fronts. Technology, including patented GMO and Terminator seeds, limits farmers’ ability to preserve seeds while increasing the power and control of corporate seed giants. Food additives extend yields of “food” with less raw product. Irradiation and Ultra-pasteurization, along with other questionable practices, ruin the real nutrition of food while extending shelf life. The list could be endless, but the goal is to put food under corporate control, with as few farmers as possible. This, of course, is called “progress”.
The belief that farmers are not important is evidenced in the attitudes and actions of both co-ops and processors as they believe that they are turning worthless raw product into something of value–(Some believe that milk has no value until it is at least pasteurized). Dairy farmers are lucky that the milk truck stops at the farm, takes the hazardous material, and actually pays them for it. No wonder farmers are strapped with paying “make allowances” to insure that the processor can make a profit, and of course, farmers have to pay the hauling charges, advertising fees, and all other appropriate fees, as a co-op or processor sees fit. Countless rural communities that rely on agriculture and provide Ag-related services have been decimated. Social impacts are obvious.
On April 26, 1971, US Secretary of Agriculture Clifford M. Hardin announced the formation of the Young Executives Committee which consisted of 15 members, each of which represented an agency of the Department of Agriculture. They were asked by the Secretary to undertake a review of the farm income question. The following is quoted from their report:
Agriculture should be viewed as an industry which consumes resources, provides employment, and produces goods of value to society. The Committee believes that national agricultural policy should aim at creating an environment which would enable the industry to provide adequate supplies of food and fiber at reasonable prices to meet domestic needs and compete in world markets. The level of farm income earned from the production of agricultural commodities, either per farm or in aggregate, should not be an end in itself. That is, the Department’s objective should not be to assure any particular level of income from farming for the nation’s farmers. Income from farming should be of concern only to the extent that it affects the level of resources attracted to the industry, and, hence, the industry’s ability to produce efficiently, adequate supplies of food and fiber. The industry should not be evaluated on its ability to provide an adequate level of living for all participants regardless of the size of their operation or managerial ability. If adequate supplies of food and fiber are being made available at reasonable prices, we should conclude that the nation has a healthy, viable agricultural industry. . . Agricultural policy should be directed toward maintaining agriculture as a viable industry and not as a way of life . . . Given these conditions, agriculture cannot and should not be expected to provide employment opportunities sufficient to preserve the nation’s rural towns and communities. If these towns and communities are to grow, additional off-farm employment opportunities must be found.
The Committee also called for the elimination of parity pricing.
In April 1973, Agricultural Trade and the Proposed Round of Multilateral Negotiations (aka the Flanigan Report) was published. This document basically sought the elimination of any and all protections and trade barriers for farmers domestically and worldwide. It was their dream and goal that eventually no country on earth would be able to offer any special protections for their farmers. Farmers would be forced to be “efficient” and would no longer be able to be such a pesky, if not powerful, lobbying force in Washington, DC, or any other country in the world. Eventually through a number of trade agreements, negotiated by “esteemed” and unaccountable experts, the farmer has essentially lost all protections and all rights to seek redress of wrongs because international trade agreements supersede farmers’ rights and domestic food policy. Politicians can throw their hands in the air and declare that there is nothing that they can do, or, as most have chosen, just ignore the concerns of farmers, because, after all, there are more important issues to deal with and more important people to talk to.
On April 1, 1981, President Ronald Reagan signed legislation that decoupled farm milk prices from parity and incrementally decreased the support price from $13.60 at that time down to $9.90 and eventually the support price was eliminated in the 2014 Farm Bill.
In 1996, the United States Congress instructed Secretary of Agriculture Dan Glickman to reform the Federal Milk Marketing Orders. In July 1999, USDA put their order reform up for producer referendum. Only Option 1B was offered. Although many did not like 1B, the referendum passed because cooperatives like Dairy Farmers of America (DFA) used the “block voting” option. Several dairy cooperatives sought an injunction against the proposed order reform on the basis that 1B would financially harm milk producers in most of the country. In the St. Albans Cooperative Creamery, Inc., et al., Plaintiffs versus Dan Glickman, Secretary of Agriculture, Defendant case an injunction was granted. U.S. District Judge William Sessions III did not focus on the merits of 1A vs. 1B but rather cited Dan Glickman for failure to consider dairy farmers’ cost of production. Judge Sessions made clear in his “Opinion & Order” that ”. . . this Court looks to the direct language of the statute to determine the sufficiency of the Secretary’s consideration, which makes no mention of indirect consideration being adequate in meeting the requirements of 608c(18). The record shows no direct consideration of regional costs in feed, feed availability, or other region specific economic factors.”
Judge Sessions also stated that “. . . the Court finds the Secretary’s Final Order and Decision violates Congress’ mandate under the 1937 Agricultural Marketing Agreement Act (AMAA) . . . “ and “. . . that Plaintiffs have a likelihood of success in their claim that the Secretary’s Final Order and Decision violates the AMAA by failing adequately to consider economic factors regarding the marketing of milk in the regional orders across the country.” Furthermore, Judge William Sessions found “. . . that the balance of hardship weighs heavily in favor of the Plaintiffs.” Judge William Sessions, III made no fewer than five references to USDA’s failure to act according to the 1937 Agricultural Marketing Agreement Act, section 608c(18). In his “Opinion and Order” statement, one such discussion spans seven pages. In late 1999, Congress instructed USDA to implement Option 1A. This satisfied the Plaintiffs, (were the Plaintiffs following the intent of the Capper-Volstead Act?) and the case was dropped without resolution of the cost of production issue.
In May 2000, USDA held hearings on Class III and IV pricing in which testimony was offered in support of implementing a cost of production factor in these formulas. In December 2000, USDA released the Tentative Decision on Proposed Amendments for Class III and IV pricing. Once again, USDA ignored the mandates of 7 U.S.C. 608 (c) 18 maintaining that the Class III and IV prices “. . . are such prices as will reflect the aforesaid factors. . .” [General Findings (b)]. This is ludicrous in light of the volatility of Class III and IV prices. However, USDA did concede that “if a sound mechanical concept could be advanced that overcomes the objections relative to supply and demand, it should be considered.”
United States Department of Agriculture issued an invitation for proposals on changing Class III and IV pricing in the summer of 2006. Approximately 40+ proposals for cost of production were submitted. National Family Farm Coalition submitted a somewhat detailed proposal to base Class III and IV pricing on a national average cost of production. In the pre-hearing, February 2006, USDA officials insisted that they do look at 608c (18) regularly and implied that they are following it. USDA turned down NFFC’s proposal. As a result, several members of the Dairy Sub-committee, particularly Arden Tewksbury and Gerald Carlin of Pro Ag, drafted legislation using the NFFC proposal as its basis. Senator Arlen Specter’s office put the draft into bill form, and it was introduced in the Senate on June 27, 2007, by Senator Arlen Specter and Senator Robert Casey, Jr. The bill is known as the Federal Milk Marketing Improvement Act of 2007 or S1722. Senator Casey, who is on the Senate Agriculture Committee, was unable to get support for S1722 to become part of the Farm Bill. The Bill was reintroduced in 2009 as S889 and then after a few changes introduced again as S1645. The Bill was introduced again in 2011 as S1640.
Forward Contracting appeared in the 2002 Farm Bill as a pilot program which was to expire on December 31, 2004. The industry and lenders continue to pressure farmers to forward contract in an effort to undermine Federal Orders and secure milk at lower prices.
In late 2004, a massive investigation of DFA and Dean Foods was launched by the United State Department of Justice in conjunction with over 20 state Attorneys General. The investigation focused mostly on abusive, anti-competitive market practices in the Southeast, where farmers were paid less than minimum FMMO prices. Small co-ops were coerced, gobbled up, or controlled by DFA and farmer members were sucked into DFA and its affiliates against their will. Some 200 file boxes of evidence were reportedly collected along with scores of sworn affidavits. The investigation ground to a halt in the fall of 2006. It may have been completed by that time but no action was taken by the Department of Justice in spite of numerous calls to do so from politicians and others.
Another investigation of dairy co-op Anti-trust issues was started during the Obama administration then promptly terminated.
The 2014 Farm Bill eliminated the MILC program and Dairy Price Supports and replaced them with the failed MPP Program and the meaningless Dairy Product Donation Program.
On January 8, 2018, the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity was released, with five main objectives related to agriculture: (1) increase e-connectivity, (2) improve H-2A visa program to facilitate more H-2A work visas, (3) expand biotechnology and public acceptance of genetically modified products, (4) increase ag exports, (5) increase access to capital. No mention of farm price or consumer choice in the report.
The 2018 Farm Bill continues the globalist agenda with apparently no intention of correcting low farm product prices and bad farm policy.
On the trade front, President Nixon pushed for expanded trade with China. Ag trade surpluses were to offset trade deficits in manufactured products. This never happened.
On January 1, 1994, NAFTA went into effect. US investment went south for cheaper wages and Mexican wages actually decreased as our trade with Mexico went into deficit.
In a 1994 lame duck session of Congress, the massive General Agreement on Tariffs and Trade (GATT) passed, putting more control of our economy in the hands of unelected and unaccountable people.
In 2000, the US Congress approved Permanent Normal Trade Relations (PNTR) with China, and as many predicted, our trade deficit with China exploded as companies invested in China for even cheaper labor. China has become a growing threat to our nation’s security even as we have lost our ability to produce basic necessities for our own people.
In dairy trade the United States imported far more dairy products than we exported from the late 1990s to early 2000s. The USDA has become much less transparent on dairy imports as they tout increased dairy exports. Even so, we are still importing a large amount of dairy products. The “oversupply” in dairy has been created in large part by the use of Milk Protein Concentrate (MPC), Milk Protein Isolate (MPI), and Ultra-filtered Milk (UF). I will talk more about MPC later.
So where does this leave dairy farmers? Dairy farmers have lost their equity, lost their retirement, lost their ability to pay their suppliers in a timely manner, lost their dignity, feel misunderstood, marginalized, and scorned. They have lost their next generation of dairy farmers, lost their hope, in some cases lost their marriages, and some have lost their lives. They have been scoffed at by their cooperatives and experts. They have been ignored by politicians. The list of politicians ignoring farmers is long, but to save time I will just say that not one of the 66 member of the House and Senate Ag Committees had the decency to respond to a thoughtful survey sent to them by Farm Women United (FWU). Also, Governor Wolf and Governor Cuomo have not had the decency to respond to letters sent to them by FWU. Agri-Mark was also sent letters, but they too have failed to respond. It doesn’t matter what a politician may say in private. If they do not openly and publicly declare their support for Dairy Farm Families and offer constructive solutions to this crisis, there is no other choice but to conclude that they simply do not care. If they cared, they would speak out. Further, if dairy cooperatives cared, they too would take constructive steps to solve this crisis. Your silence and excuses are deafening and damning.
We urge support for a $20 Emergency Floor Price and hearings to determine a path forward to create a sustainable future for the dairy farms that remain. Failure to act will result in the near total destruction of traditional family dairy farms as we have known them and the continued decline in access to locally produced wholesome food.
Thank you for your time and patience
Gerald Carlin, Meshoppen, PA
2 Attachments – see posted below
ATTACHMENT #1
How Much Milk is MPC/Ultra-filtered Milk Displacing
by Gerald Carlin – July 22, 2018
No one really knows how much milk MPC/Ultra-filtered Milk is displacing since the Federal Milk Marketing Orders (FMMO) do not collect data on MPC/Ultra-filtered Milk production and use. This is considered proprietary information. MPC and Ultra-filtered Milk are now being used in all four classes of milk products.
MPC and Ultra-filtered Milk are not approved ingredients in standardized cheeses, but the Food and Drug Administration (FDA) has “exercised discretionary enforcement” in this area, as reiterated on August 11, 2017. FDA went further and stated, “. . . we do not intend to take action against companies that manufacture standardized cheeses and related cheese products that contain fluid Ultra-filtered Milk or fluid Ultra-filtered Non-fat Milk without declaring them in the ingredient statement, as long as their labels declare milk or non-fat milk in the ingredient statement.”
We can, however, look at cheese production compared to Class III utilization in the FMMOs and California Class 4b (cheese) utilization to gain some insight. The traditional yield factor for cheese is 10.01 lbs. per 100 lbs. of fluid milk containing 3.5% butterfat and 2.99% true protein. Higher average components may yield 11 lbs. of cheese per 100 lbs. of milk. National cheese production last year (2017) for cheese falling under Class III or California Class 4b was approximately 12.4 billion lbs. Class III utilization (weighted average) in all Federal Orders was 41%. If this rate of utilization is true nationally, the average cheese production would be 14.1 lbs. per 100 lbs. of milk. The Class 4b utilization in California for 2017 was 46.2%, making an average cheese yield of 13.66 lbs. per 100 lbs. of milk. Given this information, it seems unlikely that the national average cheese yield is less than 13.5 lbs. per 100 lbs. of milk. This translates into at least 20 billion pounds of farm milk being displaced by the use of MPC/Ultra-filtered Milk in cheese. Low-fat and Non-fat dairy products are being promoted. The fat that traditionally would go into these products is used with MPC/Ultra-filtered milk to produce substandard cheese. Much of this use violates cheese standards. How much milk is being displaced in other dairy products because of MPC/Ultra-filtered Milk? Prices are in the gutter because of a supposed 4 or 5 billion pound surplus.
How much effect does farm milk price have on retail price?
US City Retail Price
Natural Cheese August 2014 — $5.56#
Natural Cheese June 2018 — $5.23#
Ice Cream August 2014 — $4.75 ½ gal.
Ice Cream June 2018 — $4.66 ½ gal.
Whole Milk August 2014 — $3.67 gallon
Whole Milk June 2018 — $2.88 gallon
US Average FMMO Mailbox Milk Price
May 2014 — $24.37
March 2018 — $15.04
Source:
California Dairy Statistics Annual 2017
Market Summary and Utilization Report Agricultural Marketing Service
Dairy Products 2017 Summary USDA NASS
Milk cows and production by state and region NASS and ERS
Dairy Market News The four classes of milk products are: (1) fluid milk, (2) soft dairy products like yogurt and cream, (3) cheeses, and (4) butter and dry milk products like nonfat dry milk.
ATTACHMENT #2
Thoughts Concerning Free Market in Dairy
By Gerald Carlin – May 6, 2018
In a functional free market system for dairy, dairy farmers form cooperatives to give them both bargaining power and marketing ability. The co-op would be owned by, and controlled by, its farmer-members.
Today, National Milk Producers Federation (NMPF) is the only voice for dairy farmers in Washington, as it claims to represent some 75% of the nation’s dairy farmers. NMPF is made up of “farmer-owned” co-ops and processors who are associate members.
Let’s examine the current “benefits” of being a farmer-owner of a large modern-day co-op. The farmer-owner, hereafter referred to as owner, pays the dairy cooperative management, hereafter referred to as employees, to market the owner’s milk. The employees are not required to pay the owner the Federal minimum milk prices.
The owner has no right to know what the employee’s salary is.
The owner has no right to know where his milk is going on any given day.
The owner has no right to know who all of the other co-owners are.
The owner can lose his market if he is critical of, or even questions his employees, therefore, most owners remain silent in fear of retaliation. Employees make examples out of owners who get out of line.
The employees vote in Federal Order referendums without the consent of the owner.
The employees have been seen at Federal Order hearings trying to get more money out of the owner without the owner’s knowledge.
The owner has no ability to call a meeting of fellow owners.
The owner has no practical ability to fire an employee.
The employees try to dictate how the owner runs his business.
The employees have plenty of lobbyists at all levels of government to ensure that their control over the owners continue.
This is the unseen and untold story of “farmer-owned” co-ops.
Farm Women United Mission Statement Farm Women United seeks to maintain a serious, honest, and open dialogue, giving a voice to farmers who are the real stewards of the earth and the foundation of any free and civilized society. Farmers produce food that sustains life. We are a culture of life. Farm Women United seeks to restore cultural respect for farmers which will result in a just and equitable value being placed on the life sustaining food which we produce and allow farmers to continue to produce food with dignity.
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