On March 25, HB 1057 was enacted into law; producers selling raw milk are now required to get a Grade B permit and may no longer sell raw cream. Formerly, producers were allowed to sell raw milk and cream without any permit. Under the new law, any producer seeking to obtain the Grade B permit must have an enclosed facility with separate rooms for milking and bottling; handcapping is allowed. For those dairy farmers who cannot afford the cost of building a facility, an official with the South Dakota Department of Agriculture has stated that those dairies not able to meet the Grade B requirements would be able to distribute raw milk legally through a herdshare program which would not be regulated by the department. Raw milk can be sold on the farm, through delivery and at farmers’ markets by producers with a Grade B permit. [See Spring 2010 update below for background on the new law].
Last fall the South Dakota Department of Agriculture (SDDA) issued proposed regulations that would have made it much more difficult to sell raw milk in the state (see Winter 2009 update below). Due to public outcry, State Secretary of Agriculture Bill Even withdrew the proposed rules. Instead, the department introduced a bill (HB1057) through the House Committee on Agriculture and Natural Resources at the start of the legislative session in January. While the bill is not as bad for raw milk producers as the proposed regulations were, it would still be more onerous than the current law. Under HB1057 producers selling raw milk would need to get a Grade B permit (current statute requires no permit) and would no longer be allowed to sell raw cream. Under the bill any producer wanting to obtain a Grade B permit would need an enclosed facility with separate rooms for milking and bottling (handcapping is allowed). The permit would cost $100 per year, which would cover the cost of an annual inspection; and in addition, there would be a $15 monthly milk testing fee. The bill also decriminalizes violations of the milk statute; however, the civil penalties could be as high as $5,000 per violation.
The biggest concern with the bill is the cost of building a facility that would be in compliance with the Grade B requirements. Lila Streff, a goat milk producer in Custer, sent written testimony to the House committee stating that she spent $85,000 to put up a facility that met Grade B standards. An official with SDDA said that those dairies that would not be able to meet the Grade B requirements would be able to distribute milk legally through a herdshare program which would not be regulated by the department. HB 1057 has passed the full House and was awaiting a vote by the full Senate in March.
The South Dakota Department of Agriculture (SDDA) has issued proposed raw milk regulations. Even though the stated purpose for the proposed rules is to protect public health, the rules are an attempt by SDDA to ensure that no raw milk is sold legally in South Dakota. Under current law, the general prohibition on the sale of raw milk does “not apply to milk, cream, skim milk or goat milk occasionally secured or purchased for his personal use by any consumer at the place or farm where the milk is produced;” neither does it “apply to any active farm producer of milk, selling and delivering his own production direct to consumers only.” There is no requirement that a farm be a licensed Grade A dairy under these exceptions. The only requirement for those selling under the exceptions is that any unpasteurized milk sold be “clearly labeled by the producer as ‘raw milk.’”
The proposed rules, in effect, take away rights given by the legislature by imposing expensive requirements that those dairies wanting to sell raw milk would not be able to afford. The proposed rules are typical barriers-to-entry regulations that will create a de facto ban on the sale of raw milk. The proposed regulations would change the current statutory exception by requiring that the producer must have both a milk plant permit (which requires a bottling machine) and a milk producer’s license.
Permits would not be issued unless standards in the proposed regulations are met. These standards include a mechanical bottling machine (handcapping would be prohibited) and a separate facility for bottling; for Grade A licensed dairies, a building separate from the milk parlor would be required for bottling. One licensed Grade A dairy farmer currently selling raw milk estimated that if the proposed rules became law, he would have to spend a minimum of $76,000 to be in compliance after figuring the cost of a separate building for bottling, a storage tank for the bottling facility, pumps to move the milk from the parlor to the bottling facility, a mechanical bottling machine and the installation costs. Aside from equipment and construction requirements, there are other onerous provisions in the proposed rules. Raw milk producers would have to test twice yearly for bovine tuberculosis (TB) and brucellosis; no other State requires testing more than once a year. Raw milk would be tested in the final container (i.e., bottle) for coliform with the maximum permissible level being ten per millimeter (10/ml). This standard has proven difficult for California raw milk licensed dairies to meet. Those producers selling raw milk would be required to maintain customer lists to be provided to SDDA upon request. Moreover, “[t]he list must be continually updated and include the data for at least 60 days. This customer list shall include customer names, addresses, phone numbers and quantities of raw milk sold for human consumption.”
A hearing was held on the proposed rules on November 17; almost thirty people spoke in opposition to the proposed rules while the only ones speaking in favor of the rules were South Dakota government employees. After the hearing, the South Dakota Secretary of Agriculture Bill Even indicated that he would probably modify the proposed rules but that opponents of the rules should not expect to get everything they want. The next hearing on the rules took place on December 21 before state Representatives and Senators who serve on the six-member South Dakota Legislature’s Rules Review Committee. If the proposed rules are not adopted by January 12, 2010, they will expire and SDDA would have to initiate the rule-making process again with the earliest the agency would be able to do so being April 2010.