Stonyfield
Farm and HP Hood Ignore Their Organic Family Farmers Request
to Be Paid a Fair Price for Their Milk;
Some of Their Farmers Head Into Bankruptcy
DEERFIELD,
Mass., March 10 /PRNewswire-USNewswire/ -- What is
more important to Stonyfield Farm and HP Hood, market share
or the health and welfare of their organic family farmers?
If you ask 24-year-old Mark Ouellette, Jr., who supplies organic
milk to HP Hood that is sold under the Stonyfield label, his
answer is very clear: "market share." "I'm losing
up to $.60 per gallon producing milk for the Stonyfield brand.
I've used up my line of credit, I'm close to maxing out my credit
card because of spiraling feed and fuel costs." He added,
"Last fall, I and many other organic farmers told both
Stonyfield and HP Hood what was happening and we were given
a 3 cent per gallon increase. Now another 8 cents starting on
April 1st, this is a slap in the face."
Mark's father was one of the first dairy farmers to sell organic
milk in Maine, and Mark started working with him when he was
fourteen, with a dream of working together to expand the family
farm. After graduating from high school, Mark realized he needed
more experience and equity and starting working on the farm,
which he purchased two years ago. "I had the opportunity
to buy this farm and everyone said there was a tremendous future
in organic dairy," says Mark, "so my family and I
made the commitment and invested over half a million dollars
believing that Gary Hirschberg would stand by his pledge to
his organic dairy farmers."
Gary Hirschberg, Stonyfield's President and CEO, proudly proclaims
on the Stonyfield Farm milk carton that "organic dairy
farmers are our heroes" and their website states that "Paying
farmers a fair price for their products is an important tenet
for many involved in organic agriculture." Stonyfield Farm
licenses their name to HP Hood LLC, owned by the John Kaneb
family, who procures, processes, and distributes the organic
fluid milk line.
Stonyfield Farm also donates "10% of it profits to help
protect and restore the Earth." "Perhaps Gary's priorities
are misdirected and he should not make so much profit at the
expense of organic farmers that lead the way in protecting and
preserving the Earth," says Maine organic dairy farmer
Henry Perkins.
Mark Ouellette's answer is a lot simpler, "Gary should
honor his marketing pledges. I milk 80 cows and don't make enough
to pay all my farm bills," says Mark, "I can't afford
basic health insurance for my wife and son; these low milk prices
are killing me!"
Mark is not alone. Aaron Bell, a 30-year-old organic dairy farmer,
has analyzed his costs and knows that he needs at least a 60
cent per gallon increase to break even. "The cost of electric,
grain, fuel, labor have all gone up in the last year but the
pay price has remained static," says Aaron. "We invested
$250,000 in our organic dairy with the expectation that it would
increase our profitability, not that we would lose money. It
would be a shame to close up shop after 8 generations with the
ninth looking on with eager eyes."
Maine dairy farmer Nick Michaud had a different response. He
is giving up organic production and heading back to conventional
production. Nick is not alone; 4 farms in VT and 5 in New York
have stopped organic dairying and returned to conventional production
in the last six months.
Since 2001, the average price paid to farmers for their organic
milk has increased by only 29%. By any measurement, whether
they are for soft costs (insurance, living expenses) or production
costs, this does not represent an adequate return for the skilled
labor and capital investment of organic dairy producers. The
data that has been collected by USDA Agricultural Research Service
and the Universities of Vermont, Maine, and Wisconsin indicate
that the base price paid to family farmers in the Northeast
in 2007 should have been $28.50 and needs to rise to $33 for
2008 rather than the current average of $27.50.
Across the country other farmers are suffering from the same
problems. "There is a very serious situation going on right
now and some of our very best farmers are looking at bankruptcy,"
says Darlene Coehoorn, Wisconsin farmer, Organic Valley member-owner
and President of the Midwest Organic Dairy Producers Alliance
(MODPA), "and we need Organic Valley, Stonyfield Farm,
HP Hood, and Horizon Organic to recognize that our families
are suffering. While the major brands are signing on new farmers
with bonuses and incentives, they need to take care of their
farmer-owners and farm partners by paying us a price for our
milk that allows us to support our families and pay our farm
bills."
The costs of doing business are rising. Health insurance rises
each year with an increase of 78% from 2001 to 2007 and a projected
increase of 10% in 2008. Fuel prices have risen by an average
of 20% over the last two years depending on the location of
the farm. The cost of shell corn has risen from $168/ton in
2001 to $380/ton and higher in 2008; barley from $150/ton in
2001 to $290/ton in 2007 and is now $390/ton as well as purchased
forages having more than doubled in the last six years. Given
the rapid increase in the organic poultry industry and human
demand for corn and soy, combined with little increase in organic
grain acreage and oil peaking over $100 a barrel, there is no
sign of any decrease in the price of purchased feed and energy.
As New York farmer, Organic Valley member-owner, and National
Organic Standards Board member Kevin Englebert writes in the
latest NODPA News, "The problem comes back to the same
old story - (organic) dairy farmers are not receiving enough
money for their efforts. The best, long term solution remains
receiving a fair price for our organic milk."
Increase
in Feed cost for organic dairy compared to pay price
|
2001 |
2008 |
%
Increase |
Whole
shell |
|
|
|
Corn |
$168 |
$380 |
126% |
Oats |
$125 |
$370 |
196% |
Barley |
$150 |
$390 |
160% |
Wheat
mids |
$105 |
$330 |
214% |
Roasted
soy |
|
|
|
Beans |
$450 |
$1,145 |
154% |
Pay
Price |
$21 |
$27 |
29% |
The
mission of NODPA is to enable organic dairy
family farmers, situated across an extensive area, to have informed
discussion about matters critical to the well being of the organic
dairy industry as a whole, with particular emphasis on:
1. Establishing a fair and sustainable price
for their product at the wholesale level.
2.
Promoting ethical, ecological and economically sustainable farming
practices.
3.
Developing networks with producers and processors of other organic
commodities to strengthen the infrastructure within the industry.
4.
Establishing open dialogue with organic dairy processors and
retailers in order to better influence producer pay price and
to contribute to marketing efforts.
For more farmer profiles please go to www.nodpa.com.