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Mar 20 2022, 6:52 AMMarch 19, 2022
Last week, Selina Rooney learned that her family farm won’t be forced out of business.
Rooney is one of 27 farmers in Vermont and 89 across the Northeast who received a stunning letter last summer from Horizon Organic, now owned by Danone, an international food company, where her family had been shipping its milk for decades.
The letter said the company would stop purchasing milk from those producers, leaving the farmers without a buyer. Contracts were set to end in August 2022 before Danone extended them to February 2023.
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“It was actually a shock,” Rooney said. “It’s something that’s unheard of in the dairy industry. I’ve never heard of a creamery just cutting off all of its farms.”
Meanwhile, Maple Hill, another organic dairy company, recently dropped 46 farmers in New York.
With a glut of organic milk on the national market, the Rooneys, along with dozens of other farms, didn’t think any of the other regional milk buyers would take them on. But last week, Organic Valley, a farmer-owned co-op, announced it would offer “memberships” to many of the Northeastern farmers left behind by Danone and Maple Hill.
The news offered area organic farmers a solution where none seemed possible. In the past few months, state and regional task forces have assembled, sending pleas to the U.S. Department of Agriculture for assistance. Despite those efforts, options for farmers remained limited.
“I was on the Horizon Task Force, so I would get to go to meetings and get to have some input,” Rooney said. “But I really felt hopeless. It felt like there was no answer.”
Rooney’s family has been farming in Lamoille County for eight generations. She farms with her parents in a section of Morrisville called “Mud City,” where they transitioned their 50-head herd to organic dairy 22 years ago. They started shipping to the Organic Cow, a local distributor that was eventually purchased by Horizon Organic, then by Danone.
“My parents have worked so hard to make this farm what it is today, and to think that all that hard work and effort might all go for nothing was just really sad,” Rooney said.
Danone’s exit from the region marked a major stumble for Northeastern organic dairy, an increasingly vulnerable industry that’s been quivering on shaky ground for the last decade.
Loopholes and meager enforcement have allowed larger farms across the country to enter the organic market, which has become flooded with organic milk. Farmers have been paid a shrinking amount for their product — often less than what it costs to produce the product.
Milk trucks sometimes struggle to reach producers in Vermont, where farms are often located on remote hillsides accessible only from seasonally-challenged back roads. Recent problems such as scarce labor and soaring gas prices have added extra challenges.
Organic Valley’s decision has allowed the industry to regain its footing. Across the region, dozens of farmers are no longer facing an immediate crisis.
“I was just so happy when Organic Valley stepped in and said, ‘Yep, we’ll take you,’” Rooney said. “It was kind of like being thrown a lifeboat. When my dad was sending the paperwork, I was right there watching him, and I was getting choked up over it because I didn’t think this day would come.”
Other companies, such as Stonyfield Organic, have taken on additional former Horizon farmers in the last few months. Jim Ackermann, a farmer in Cabot, recently signed a contract with the company, and said he’s “more secure than ever now.”
“We’ve been trying to get all these guys for the last five years,” he said. “I’ve been calling every three months, and he finally called me back with good news. We’re super excited.”
But while farmers, legislators and company leaders have applauded Organic Valley’s decision to accept more farmers, they’ve also warned against complacency. With the industry’s woes far from solved, many say change at the national level is the only way to secure organic farmers in the Northeast.
Last week, Travis Forgues, who oversees membership at Organic Valley, traveled from the company’s headquarters in Wisconsin to deliver offers, in the forms of “letters of intent,” to Northeast farmers who previously sold milk to Danone.
While Danone and Maple Hill left a total of 135 farmers without contracts, Organic Valley will offer membership to 90 farmers.
Within those 135, Forgues said, some farmers retired, some decided to move away from agriculture and some have been picked up by other companies, such as Stonyfield. Some don’t yet meet the company’s qualifications, such as high standards for animal care, but Forgues said the company and Vermont’s Agency of Agriculture are hoping to help those farmers eventually qualify.
The letters are a starting point, Forgues said. While the company is prepared to commit to those farmers, they don’t need to decide yet whether they’ll sign on with Organic Valley.
“We just want to be out here saying ‘we’re committed to you now, if this is where you’re at,’” Forgues said. “‘If you’re just scared to death that you don’t have a market and you’re ready, let’s commit to each other.’”
The last week has been filled with hugs from farmers, he said. Some farmers, he said, have told him they’ll be able to sleep again.
“I want people to take a sigh of relief, and I want these farmers to feel like their journey of having to find a home is over,” he said. “But I don’t want people to get complacent and say, ‘OK, Organic Valley took care of this, we don’t have to worry about anything anymore.’”
“I think it’s vitally important that people recognize the importance of infrastructure, community and making sure we can continue to grow markets so we can save more family farms for the future,” Forgues said.
When Paul Stecker and his family decided to give up organic dairy farming last year, they had no idea Danone would soon send them a termination letter. The letter arrived in August, two weeks after their last milk cow left.
Looking back, the writing was on the wall, he said.
“Back in the very early ’90s, we went bankrupt dairy farming conventionally,” he said. “Organic dairy started feeling a lot like that did.”
In the mid-2000s, Stecker said his farm was receiving around $42 per hundredweight, the unit for measuring milk — around 112 pounds. Profit margins grew smaller over the years, Stecker said. His son and wife took other jobs. By the time they sold their cows, they were down to around $32 per hundredweight, and expenses had risen.
Stecker points to supply and demand as the source of the problem, along with loopholes and lack of enforcement of national organic standards.
“When you have these enormous farms just cranking out the milk, and they’re really not following the same standards that we are,” Stecker said, “you just can’t go up against those farms financially.”
Stecker wasn’t alone — in Vermont, many organic farmers are not earning back what they’re spending to produce milk.
Jen Miller, farmer services director at Northeast Organic Farmers Association of Vermont, analyzed costs that factor into organic dairy production and found that the average cost of producing the equivalent of a hundredweight is $37.26. The range starts at $32.43 and rises to $42.47, she said.
Pay prices vary enormously depending on the farmer, the milk and the company, she said.
Organic Valley’s pay price is set by the company’s board of directors, which is made up of farmers elected by the company’s membership. Currently, the company’s base price is around $30 per hundredweight. That number can increase depending on the quality of the farmers’ milk.
This year, the cost of essential products like grain and gas are high, but those rising prices don’t always cause a hike in dairy prices.
While some Vermont farms are still earning more than their production cost, Miller said, “it’s getting harder and harder for everyone to do that, and there’s less and less wiggle room.”
At the national level, a number of players are working to even the playing field between small farmers in the Northeast and large farmers in other areas of the country. To do that, many have asked the USDA to get rid of a loophole in the National Organic Program.
The loophole, created to allow conventional farmers to make a one-time transition to organic farming, permits animals not raised organically to be transitioned to organic later on in their lives. When farmers use the rule to continually raise young livestock nonorganically, which costs less, it puts the rest of the organic farmers at a disadvantage.
The origin of livestock rule, currently before the federal Office of Management and Budget and in its final stages, would close that loophole, leveling the playing field between organic farmers.
Another rule, related to the amount of time animals spend in the pasture, hasn’t been strictly enforced in some cases.
U.S. Sen. Patrick Leahy, D-Vt., who helped author the National Organic Program, recently helped allocate $22 million for the program’s administration. In the accompanying legislation, he directed the program “to deliver the strongest possible enforcement oversight.”
“These standards have been delayed far too long, while we have seen the markets of small organic dairies in this region displaced by larger and larger farms that exploit every loophole,” he said in a statement to VTDigger.
Leahy said he has repeatedly raised the issue with USDA Secretary Tom Vilsack, including on his visit to Vermont in August.
The USDA has sent other help to the region, including $20 million in extra funding for the Northeast Dairy Business Innovation Center, announced last week. The windfall came out of the Northeast Dairy Task Force, assembled to address the Horizon crisis.
Other initiatives seek to bolster farming at a local level. Stonyfield Organic has started the Northeast Organic Family Farm Partnership, a program that “encourages all stakeholders in the food system — consumers, farmers, large and small dairy processors, retailers, restaurants, school lunch programs, college cafeterias, government officials — to become partners in efforts to support and safeguard the region’s organic family farmers,” an announcement about the program said.
Brands, for example, can become partners by ensuring that 50% of their dairy products come from the areas hardest-hit by potential farm closures. Retailers that purchase partner brands can display a logo that helps identify them to customers.
Abbie Corse, an organic dairy farmer based in Whitingham, sits on the Organic Valley board. In this instance, Organic Valley has gone “all in for the greater good,” she said.
According to Forgues, the company’s decision won’t have an immediate impact on the existing Organic Valley farmers — there are already 99 in Vermont. If a farmer wants to grow their business and produce more milk next year, he said, the company will have to consider that request when the time comes.
Corse said she’s willing to take a potential hit “if it means that those farms that we can take on can stay in business.”
“More is more,” she said. “We need more farmers.”
Her family specifically chose to sell to Organic Valley because it’s a farmer-owned cooperative, she said.
“I don’t want to be a big farmer,” she said. “Part of the way that we’ve remained viable is by focusing on quality over quantity. That’s been a very focused strategic component of our business model here, and Organic Valley supports that.”
Organic Valley pays farmers a higher premium for higher quality milk, which is based on things like the milk’s protein fat and somatic cell count. Still, many producers for the company aren’t earning as much as they’re paying to produce milk, she said.
“There are those out there who claim that’s on Organic Valley,” she said. “I think that’s insane. It’s on consolidation. It’s on antitrust regulations. It’s on the reduction of integrity to the national USDA organic standards, and the fact that Vermont refuses to compromise on that, but other places will. And so we’re competing in a marketplace that’s stacked against us.”
Organic farming checks boxes critical to protecting the environment and planning for food security in a world affected by climate change, she said, and in a state that has the highest number of farms per capita, it’s an essential industry to protect.
Organic Valley is a good landing spot for farmers coming out of a bad situation with Danone, she said. The fact that it’s both farmer-owned and the largest dairy cooperative in the nation, she said, “really, really matters.”
“The farmers’ voice and the farmers’ vision is really embedded in how Organic Valley functions,” she said. “In this moment, particularly, that’s kind of everything.”
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Emma Cotton is a Report for America corps member who covers the environment, climate change, energy and agriculture. Previously, she covered Rutland and Bennington counties for VTDigger, wrote for the Addison Independent and served as assistant editor of Vermont Sports and VT Ski + Ride magazines. Emma studied marine science and journalism at Eckerd College in St. Petersburg, Florida.
Email: [email protected]
View all stories by Emma Cotton
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