A few days ago, Organic Valley, the huge Wisconsin-based dairy cooperative, ran a “holiday season” ad on Facebook offering discount coupons of $1.50 or $2 on butter, cheese, and eggs (not $5, as the ad suggests). I guess it’s not a huge surprise that thousands of people lapped the coupons up—the coupon offer was shared nearly 2,500 times. There were more than 400 comments, most of them thanking Organic Valley, or informing other Facebook readers that, yes, the coupons are honored in grocery stores.
I had a different reaction, based on Organic Valley’s decision six years ago to ban from its cooperative, dairy farmers who had the temerity to sell some of their dairy’s milk unpasteurized, on a private basis, to consumers. Ever since it decided to throw its weight around, and not only force small farms into a take-it-or-leave-it situation, but do the state of Wisconsin’s dirty work in trying to limit access to raw milk, I’ve carried out my own personal boycott of the processor’s products.
I said as much at the Organic Valley Facebook ad: “Organic Valley several years ago put the squeeze on many of its farmer suppliers by cutting off those who sell raw milk directly to consumers. I’ve avoided their products since then.”
To its credit, Organic Valley responded to my dissenting comment: “David – The family farmers who own our cooperative control their destiny and receive a stable pay price for their products. When dairy farmers join the cooperative they sign an agreement that stipulates all milk must be sold to the cooperative for distribution by the cooperative. In our cooperative, decisions are not made in a top-down fashion. Instead, farmer committees are formed to address topics ranging from animal husbandry practices to pasturing requirements to off-farm milk sales. In the case of our farmers selling raw milk, it was very difficult for our farmer committees, dairy farmer executive committee and farmer board to choose the path they did.We realize that raw milk is important to you and to many other consumers, but this is not the business that we are in. Our business is selling certified organic milk with a regional model of production and distribution.”
In other words, it’s our way or the highway.
I responded by explaining the difficult economic problems facing many small dairies, that “raw milk sales are crucial to the economic survival of many dairy farmers, simply because the prices they receive from you and other processors are so low. Selling raw milk directly to consumers (and not in direct competition with OV) gives them an important opportunity to earn much needed income, while still supplying OV. You have used your financial muscle to deprive many farmers of that opportunity.”
Not surprisingly, that ended the discussion. But the exchange got me wondering how things have worked out for small dairies in Wisconsin, known as America’s “dairy state,” under the restricted competition model promoted by Organic Valley and other processors Not so well, it turns out. The state continues to lose 4% or more of its dairy herds each year, as it has done for the last 40 years. The only good news, if you want to call it that, is that the bleeding has slowed some—instead of losing 600 to 1,000 herds annually, Wisconsin is “only” losing about 400 each year the last few years. How much of the slowing is a function of the fact that there is a smaller base of 9,000-plus dairies? Who knows.
What’s clear is that Wisconsin, whether ruled by Democrats or Republicans, continues to stick it to its dairy farmers, especially those seeking desperately needed income opportunities by selling raw milk. What’s also clear is that Organic Valley’s business model continues to hum along, unfettered by such inconveniences as free enterprise. Forcing dairies into a particular dairy distribution arrangement is a great model for Organic Valley….until Wisconsin eventually runs out of dairies.