Raw Milk – Rx for Dairy Crisis


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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About the top photo:
“Let the Good Times Flow for National Dairy Month!”
Posted 6/4/2015 by Dana Coale, Deputy Administrator of the Agricultural Marketing Service’s Dairy Program
Source: https://www.usda.gov/media/blog/2015/06/04/let-good-times-flow-national-dairy-month

STATE RAW MILK BILLS – 2018 UPDATE


There have been raw milk bills before the legislature in ten different states so far this current session. A bill has made it to the governor’s desk in Utah and there is legislation in at least a couple of other states that has a realistic chance of passing, including Louisiana which is one of seven states left where any raw milk sales or distribution is illegal. Bills before the legislatures include:

IOWA House File 2055 (HF 2055) would allow the unregulated sale of raw milk and raw milk products on-farm and through delivery. There is a labeling requirement that there be a statement on the container notifying consumers that the product has not been inspected and is not subject to public health regulations. Bills have also been introduced in the Iowa legislature that would legalize raw pet milk sales (HF 2057) and the distribution of raw milk through herdshares (HF 2056) but HF 2055 is the only raw milk bill the legislature has considered so far. On January 30 a subcommittee of the House Committee on Local Government recommended passage by a 2-1 vote; the bill is now before the full committee. Iowa is one of the remaining states that prohibits any raw milk distribution.

LOUISIANA companion bills, Senate Bill 188 (SB 188) and House Bill 437 (HB 437), have been introduced that would allow the on-farm sale of either cow milk or goat milk of an average of 500 gallons per month. No permit is required but producers are subject to inspection and must comply with milk testing, herd health, and sanitary standards as well as a labeling requirement that there be a warning that the raw milk may contain harmful bacteria. The bills are a reintroduction of Senate Bill 29 (SB 29) that nearly passed in 2016. SB 29 passed out of the Senate and was defeated in the House committee by one vote.

MASSACHUSETTS Senate Bill 442 (S.442) and House Bill 2938 (H.2938) are companion agricultural omnibus bills that include provisions which would officially legalize herdshare agreements and would allow the off-farm delivery of raw milk by licensed dairies. Under the bill, farmers with no more than twelve lactating cows, goats or combination of cows and goats can enter into herdshare agreements with those wanting to obtain raw milk. There must be a written contract that includes a statement that the raw milk is not pasteurized nor subject to inspection by the state Department of Health nor the Massachusetts Department of Agricultural Resources (MDAR). MDAR has power to issue rules on testing but cannot require testing more frequently than once every two months. The bills allow from a licensed raw milk farmer to deliver raw milk to a consumer with whom the farmer has a contractual relationship, including through the farmer’s agent and through a community supported agriculture (CSA) delivery system. The bill gives MDAR power to issue regulations governing delivery; the regulations must allow for non-mechanical refrigeration. The bills have passed out of the Joint Committee on Environment, Natural Resources and Agriculture and will likely next be assigned to the Senate Ways and Means Committee.

NEW JERSEY Assembly Bill 502 (A502) is the same bill that has been introduced the prior three legislative sessions, A502 allows for the on-farm sale of raw milk and raw milk products by a licensed dairy. Producers must comply with labeling, signage, herd health, and milk testing requirements. The bill also legalizes herdshare agreements and states that no permit is required for the distribution of milk through a herdshare contract. New Jersey is one of the remaining seven states that prohibits any raw milk distribution. A502 has been referred to the Assembly Agriculture and Natural Resources Committee.

TENNESSEE House Bill 2229 (HB 2229) and Senate Bill 2104 (SB 2104) would have allowed the unregulated direct sale from producer to consumers of all foods except meat, on the farm, at farmers markets and other venues. There were labeling and signage requirements but no licensing or inspection under the bills. The bills were both defeated in committee; under current law, the distribution of raw milk and raw milk products is legal through herdshare agreements. Herdshare programs have been thriving in the state.

UTAH Senate Bill 108 (SB 108) has passed through both the Senate and House and are on the desk of Governor Gary Herbet. SB 108 allows the delivery and sale of raw milk through a mechanically refrigerated mobile unit by licensed dairies. Currently only the on-farm sale of raw milk by license holders is legal unless the producer has a majority ownership interest in a retail store (only one of the state’s ten licensed dairies meets this qualification). SB 108 also allows for the unlicensed on-farm sale of up to 120 gallons per month by unlicensed dairies if the producer is in compliance with labeling, recordkeeping, milk testing, and milk cooling requirements. Producers wanting to sell under this exemption must notify the Utah Department of Agriculture and Food (UDAF) that they are doing so. UDAF has power under the bill to order a producer to stop selling raw milk if the producer’s dairy is linked to a foodborne illness. The department has the power to levy administrative fines against producers who have been linked to a foodborne illness outbreak.

VIRGINIA Senate Bill 962 (SB 962) and House Bill 825 (HB 825) would have officially legalized and regulated herdshare operations. State policy in Virginia has long been to leave the many herdshare programs existing in the state alone. The original versions of both bills would have criminalized the refusal of either farmers or consumers to turn over copies of their contracts to government agencies. Both bills stated it was illegal for anyone besides the party to the contract to receive raw milk; in other words, giving raw milk to family or guests would have been a crime. Criminal penalties for violations of the bill’s requirements were up to one year in jail and a $2,500 fine; every day the violation continued would be a separate offense. The bills also required that the herdshare contracts contain a clause that shareholders assumed joint liability if the herd or any milk produced by the heard was responsible for any injury or illness. SB 962 was in Senate committee and shortly afterwards was stricken in the House committee.

For further updates on the progress of raw milk legislation, go to the bill tracking page at realmilk.com.

Raw Milk Legalization — What Is New Jersey Waiting For?


The New Jersey Department of Health (NJDH) has been busy recently on the raw milk front. In one investigation NJDH sent cease and desist letters to various dropsites at private residences. The dropsites were allegedly distributing raw milk and raw milk products to customers of an out-of-state dairy. In another action NJDH was investigating a New Jersey based food buyers co-op sourcing raw milk from multiple out-of-state producers. The department was trying to determine which of the producers was responsible for an illness caused by the consumption of raw milk. The two cases represent an opportunity for the state to evaluate its law prohibiting the sale and distribution of raw milk and acknowledge that the law needs changing.

The cease and desist letters threatened the families operating the dropsites with fines for distributing raw milk. This isn’t the first time NJDH took this kind of action. In 2007 NJDH also sent cease and desist letters to individuals having dropsites at their residences. The difference from the investigation eleven years ago is that NJDH sent letters to considerably more dropsites this time around; not surprising since demand for raw milk has been consistently increasing for years. Otherwise law-abiding citizens will do what they have to in order to obtain raw milk in states like New Jersey where the sale is banned; whether NJDH will admit that or not, it’s the reality.

In the case of the food buyers co-op, NJDH was having a difficult time trying to determine which dairy was responsible for making a member of the club ill with brucellosis. There were media reports discussing the NJDH investigation but none reporting that the department had identified the producer responsible for the illness; it is clear that NJDH was having problems with traceability.

If you combine the growing demand for raw milk among New Jersey residents along with the traceability issue NJDH has been having with out-of-state dairies it would be a good move for the state to consider legalization. A good first move for the state would be to allow by policy the distribution of raw milk through herdshare agreements; under herdshare contracts raw milk consumers obtain an ownership interest in the dairy animal(s) enabling them to obtain raw milk and hire the farmer to board, care for and milk those animals. Herdshare programs are closed-loop arrangements in which there is a high level of traceability if there is a suspected illness; something NJDH should appreciate after what it has been through.

New Jersey dairy farmers have lost millions of dollars in potential revenues to Pennsylvania raw milk producers (there are less than 70 Grade A dairies left in the state) but that never moved the state government to end the prohibition on raw milk sales and distribution. What could change the state’s position though is the difficulty its health department had in conducting an investigation of foodborne illness combined with the fact that demand for raw milk among New Jersey residents will only continue to further increase. Allowing the distribution of raw milk through an arrangement outside the stream of public commerce would be a good first step for the state.