A California milk processing plant, from the California Dairies Inc. web site. Whenever you hear business executives blame poor profits and sales on their customers’ lack of intelligence, you know there’s a serious underlying management problem. In fact, you tend not to hear too many knowledgeable business people do it these days–they know better.
But that’s exactly what California’s largest dairy cooperative is doing. In its September newsletter, the cooperative publishes a long article (actually, tirade may be a more apt description) about the growing popularity, and dangers, of raw milk.
“There are an unbelievably high number of ignorant consumers in our world. Many college educated people that you would think should know better, in fact don’t know better…It’s always been a good idea to cook our food because it does contain bacteria and some in the right amounts could make your really sick. That should be all that needs to be said but apparently it isn’t for some folks and the number is surprisingly large!”
The tirade goes on to cite various government and other data suggesting that raw milk is a public health hazard. We know, of course, that that isn’t true. Yes, people occasionally become ill from raw milk, just as they become ill from hamburgers and raw spinach. Educated consumers know all that and factor it into their decisions about whether to drink raw milk, and clearly, lots are willing to take the risk.
Now, this isn’t some tiny rural cooperative somewhere. California Dairies Inc. is not only California’s, but the nation’s largest dairy cooperative, with $3.5 billion in annual sales. It’s made acquisitions over the years to increase its size.Smart business people run this organization, or so you’d think. But they are clearly frustrated by the fact that they are losing market share, and that raw dairies are growing.
Says Mark McAfee of Organic Pastures Dairy Co., who sent me the newsletter item, “There are 400 cows that produce raw milk for people in CA. There are 1.9 million cows and 1850 dairies that produce raw milk for pasteurization in California. Is David kicking Goliath’s ass? Our message is somehow making a serious impact and threatening the dead milk paradigm.”
I’m not sure what the exact nature of the business problem facing California Dairies Inc. is, but it certainly isn’t the consumers’ intelligence. Consumers vote with their feet and, in this case, with their glasses, and California Dairies Inc. needs to look inside itself rather than at its customers’ judgment. It’s failing its members, the dairy producers, which are receiving prices (noted on the left of the newsletter) that are below production costs. One option for producers is to do what Edwin Shank, described in my previous post, are doing. It’s just one option, but it is a better business option than blaming your customers. They tend not to appreciate being told they’re ignorant.
Very nice post.
The 1850 dairies in CA that produce conventional pastuerized milk recieve just $11.50 per CWT and according to the CDFA monthly cost analysis it costs about $17.50 to break even. This economic torture has been ongoing for more than a year now. These numbers are shown on the left hand margin of the CDI letter that you posted. There is no change or hope in sight. Economic Darwinism is proving to be cruel and correct.
Personally I feel really bad for them. They cry every night and no one hears the sobbing. They are market disconnected and no consumers ever come to visit. They have "no trespassing signs" at their dairies when the signs should say "welcome….please come and see us". The processors are laughing all the way to the bank and they beg no changes. The middle of the food chain kills the food and robs the value from everyone…..farmers and the consumers both.
Say a prayer for 1850 CA dairymen and their families. All they are doing is what they were taught to do by University professors ….to get their "A plus" in their dairy courses they had to remember to "Get Big or Get Out". They were told and taught to "feed the world" and produce with out regard to the market demand and or issues now they can not feed themselves. They were taugh to use advanced antibiotics, cheap soy and BST hormones to increase production. How tragic it all is. Sounds like Lactose Intolerance has finnally sought its true revenge.
Advice to any dairyman out there on the CDI Titanic…your life boat says "Consumer Connected" on it. Secondary advice….do not listen to your marketing department….they need to be fired. When the CDI marketing department has failed to study the markets and calls smart people stupid. You should cut them their last check.
The CDI letter uses the oldest trick in the book….when all else fails use food safety warnings and statements like "emerging public health threats" as your last resort to stem the tide of market loss.
David has not only Kicked Goliaths Ass….David is eating his lunch.
I love my consumers each and everyone!!!
All the best,
Mark McAfee
-Ghandi
And if they do for raw milk what they’ve done to ‘organic’ then all the beauty that is the fresh stuff, will be totally ruined.
Raw milk is real…and the word is getting out.
You are absolutely right. The industry will try to co-opt raw milk. The only way to be sure of what you are getting is to KNOW YOUR FARMER, know his/her practices, know how ethical he/she is and –if possible–know the cow(s).
Jean
http://www.marlerblog.com/2009/10/articles/lawyer-oped/comparing-the-food-safety-record-of-pasteurized-and-raw-milk-products-part-3/
The round hole of industrial ag pointed to by milk farmer is a system that generates its money from processing. From their perspective the system works real well because the bad quality that inevitably results from the industrial farming model isactually must bemasked by the very processing that brings in the real money. Our regulatory establishment likewise gets its money from the same system.
On the other hand, raw milk’s square hole is shaped by a system anathema to big business. Raw milk is ready for the consumer as soon as it falls through the filter and into a bottle, so needs only a grower and a retail infrastructure (sometimes only a local infrastructure) to be successful. Skipping the middle men (and middle machines) leaves the industrial model beached, with nothing to do. No wonder the frustrated spitting that consumers must be stupid to not support them. They have no other alternative.