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Farm Legal Series #1: Raw Milk Sales Explained
236 Plays4 years ago
Welcome to the first episode in a new series Barn2Door is launching in partnership with the Farm to Consumer Legal Defense Fund. FTCLDF is a non-profit organization of lawyers supporting Farmers across the country and helping them navigate the unique legal challenges Farmers face. In this episode, we focus on dairy regulations, how they vary across the country, and the resources FTCLDF has to help Farmers sell their Dairy products direct-to-consumer.
Show notes:
https://www.farmtoconsumer.org/
https://www.barn2door.com/resources
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Transcript
Introduction and Focus on Farm Success
00:00:02
Speaker
Welcome to the Direct Farm podcast, the weekly listen for farm selling direct. We'll talk about the four levers for farm success, which are quality, brand, price, and convenience. We'll hear from outside industry experts and producers like you to delight your customers, save time and to increase your direct farm sales and business. We're glad you're here.
00:00:26
Speaker
Welcome everyone to the Direct Farm podcast.
FTCLDF's Mission and Protection for Farmers
00:00:29
Speaker
We've got a great conversation for you today with the Farm to Consumer Legal Defense Fund, or the FTCLDF, if you can remember that acronym. The Farm to Consumer Legal Defense Fund is a nonprofit organization made up of lawyers around the country who serve farmers by helping them protect, defend, and broaden the rights and viability of independent farmers.
00:00:49
Speaker
artisanal food producers, and their consumers. It's really exciting for us. This is a first in a series of podcasts and conversations we're going to be doing with them. And I'm delighted to welcome today, Alexia Kulwick, who is the executive director of the Farm to Consumer Legal Defense Fund. And she's a licensed attorney in both Illinois and Wisconsin, practicing law for over 20 years.
Alexia Kulwick's Background and Passion
00:01:10
Speaker
And her experience has inspired her interest in US agriculture,
00:01:14
Speaker
in helping to promote small-scale farmers and sustainable farmers while protecting the rights of independent producers across America. While the timing of this can be more important when we look at what's happening in our market today, welcome, Alexia. Thank you so much for joining us today. Thank you so much to Barn to Dora for having us. We're really excited to be here. I appreciate it. Well, awesome, Alexia. Well, let's get started first for our listeners. Tell them what the Farm to Consumer Legal Defense Fund is and how it came to be.
00:01:43
Speaker
Sure. Thank you. So as you said, Farm to Consumer Legal Defense Fund is a nonprofit organization and we protect and defend the rights to grow and produce and consume food directly from the farm. We do have members that will engage in sales at farmer's markets and small retail as well. But the idea is really protecting and guiding producers, farmers through the regulatory process that is really complicated for a small producer in this country.
Regulatory Challenges for Small-Scale Farmers
00:02:13
Speaker
The food system's really set up with regulations geared towards larger players, and it gets really confusing and complicated fast for a small producer who simply wants to grow healthy food, sell it locally, directly to the consumer, shouldn't be as complicated as that is.
00:02:29
Speaker
Yeah, say that again. I mean, when we look at the spread of 2 million plus farmers in America, only about 10,000 that we're aware of make more than $5 million a year based on USDA data. And about 640,000 of them are family on farms that make somewhere between 50K and $5 million. And yet they produce 75% of the food in America. And so
00:02:48
Speaker
Like you said, it's a myriad, you know, maze of regulations and requirements that can be overwhelming for a lot of small farmers. What led you specifically to be the executive director of this organization? You know, how'd you get so passionate about its mission? What's your background beforehand?
00:03:02
Speaker
Prior to coming to Farm to Consumer Legal Defense Fund, I actually had been doing some work at the University of Wisconsin on farm labor projects and realized that I was much more interested in sort of the food system as a whole and in agriculture as a whole. And I went back and got an advanced degree in agriculture and food law with an eye towards wanting to represent smaller producers and small farmers and came across Farm to Consumer Legal Defense Fund.
00:03:30
Speaker
What really attracted me to Farm to Consumer Legal Defense Fund is one of the very few organizations providing direct legal services to these small producers, right? So we'll help them through the regulatory process. We may have to defend them in regulatory actions. We'll help them draft contracts. Well, we will draft contracts for them. A good number of nonprofit organizations that I have a lot of respect for that are helping
00:03:55
Speaker
sustainably run farms and there are some organizations doing public interest litigation, but there's very few on the ground, just providing legal services to these small farmers and producers. And that's what I think we need I mean you point out the number of farmers.
COVID-19's Impact on Food Supply and Small Producers
00:04:11
Speaker
that sounds like a lot and you know it used to be six million right and I think that the policies are such that it has encouraged that kind of consolidation and growth and I think what we saw from COVID really is how vulnerable that food supply is and we're much better off having diversification and allowing smaller producers be able to provide their goods to their communities.
00:04:33
Speaker
Yeah, these small farms all across the country did such a magnificent job over the past two years during this pandemic and being able to serve the local communities and being able to ensure that people have food on their table. Food security is such an important issue. But like you said, the regulatory hurdles can be pretty daunting at times. For our listeners, help me better understand the organizational structure, because you guys work with farmers in every state, right? So if somebody signs up to become a member and support the Farm to Consumer Legal Defense Fund,
00:05:03
Speaker
What does that look like? How do they get involved? How can they access your services if I'm a farmer in Minnesota versus a farmer in Arizona? Sure. And first, if I could explain if anyone takes a look at it, we have a couple of different kind of memberships. So we do have farmer members. We have small food producer members and consumer members. And consumer members really support the work of the producers, right? So we're not providing direct legal services to them, but they're supporting that work of your small producers.
00:05:31
Speaker
And then once you are a member, it's really simple. I mean, we do have a hotline for emergencies. You can simply call into the office to get an attorney. You can contact
FTCLDF Membership Process and Legal Support
00:05:41
Speaker
us through your membership account that we have online. You can simply email us. So once you remember that it's really very simple, you just reach out and some intake will be taken by our office to determine what kind of issues you have.
00:05:56
Speaker
And then I will typically take a look at that and send it out to someone to handle. We have a small staff of folks that can do a lot of consulting in-house. So we can do, and I know we'll get into some of this in a few minutes, some of the contracts that we draft for our members.
00:06:11
Speaker
And we can provide some just consulting and legal advice in a lot of instances in terms of what kinds of state agencies are involved in regulating a particular product, what kind of licenses might be required, that kind of thing. If it becomes a more complex legal issue, we also have a network of attorneys across the country to call upon, you know, that are doing a variety of some pro bonos and I'm doing work that we compensate if they're going to be doing actual litigation for us, that kind of thing.
00:06:41
Speaker
So it really kind of depends, but we have a network of people across the country. And what I'll say about that is they too are very passionate. I mean, everybody that's doing that kind of work with us, it's because they really support the small producers and see what's happened in our food system.
00:06:58
Speaker
Well, thank you so much for your work and the work of the entire organization at the Farm to Consumer Legal Defense Fund. I know we refer a lot of farmers your way and we're really happy to help raise awareness so that farmers don't feel alone, that they feel like they do have a hotline to call somebody who can give them legal advice on what they can or can't do or what some of the potholes might be.
00:07:20
Speaker
So let's shift over to talking about dairy as kind of one of the first big topics that we're wanting to tackle with you because obviously dairy is highly regulated, varies dramatically state to state. And I think most recently in the fall, we saw that Horizon Organics canceled 89 dairy contracts throughout the Northeast, Vermont, Maine, New Hampshire, and several dairies in New York as well.
00:07:41
Speaker
Now, a lot of these producers have undergone extensive audits, documentation, all kinds of processes just to be operating. Can you speak, you know, just a little bit about dairy generally, like how these laws around dairies vary from state to state, you know,
00:07:56
Speaker
because obviously I know it, you probably can't sum it up in 30 minutes, but can you give our listeners some sense of kind of the complexities around dairy specifically? Sure. And first I'll just say that I'll speak, there's kind of a few different sorts of regulations regarding dairy and some involve pasteurized milk and some provide what we're calling raw milk, which is unpasteurized, but intended for human consumption.
00:08:19
Speaker
So starting with pasteurized, which is what horizon organics would have been, there is something called the federal milk ordinance, which is not really a federal law, it's more like a model federal law. And then states in turn can adopt all or parts of the federal milk ordinance. And so that law dictates
00:08:40
Speaker
very strong requirements for pasteurization for the processing plants themselves. And perhaps then what kind of licensing requirements are provided for the producers themselves. And so producers typically then need to obtain some sort of state milk dealer's license. They'll probably be subject to a number of inspections regarding health of the animal remaining disease free.
00:09:03
Speaker
If you're a producer for Horizon Organics, most likely you would have undergone an audit under the National Organics Program to ensure that you're meeting all of those requirements in terms of the use of antibiotics, the use of feed, and those sorts of issues in terms of the animals themselves.
00:09:23
Speaker
I'll also point out that I think of the larger producers like Horizon will then just by contract also have very specific requirements for the growers. So even though you've got a local producer who's producing organic, they're really doing it under contract for those major milk producers that then process it.
00:09:43
Speaker
and they have had to meet a series of state law regulations, federal, probably the organics program. None of that is cheap and none of that is easy to meet all those requirements on a regular basis. The processing plants, of course, themselves have a whole set of regulations, but as far as the producers are concerned, they'll be very related in terms of their facilities and their methods of maintaining their herds and making sure that their product is safe.
00:10:09
Speaker
Well, let's talk about the shift from being a producer that sells into one of these very large, you know, through like a major dairy syndicate. And let's talk a little bit about like what it looks like if you were to shift towards selling direct to consumer, particularly in the case of raw milk. What are some of the ways in which, you know, the Farm to Consumer Legal Defense Fund
00:10:29
Speaker
can help farmers begin to navigate some of these raw milk requirements. Like what are some of the big issues that you see from state to state? And I know they're going to vary quite a bit, but what are the issues particularly there of someone thinking about getting into this?
00:10:41
Speaker
Well, a lot of issues and ways that we can help. Issues first and foremost are that the interstate sales of round milk is prohibited.
Complexity of Raw Milk Regulations
00:10:50
Speaker
The FDA prohibits the interstate sale. So that means selling across the state lines, interstate you can't sell. Correct. Which in the Northeast does get dicey because you get in and out of states pretty quickly, right? Yeah.
00:11:02
Speaker
In every state then has the ability to regulate raw milk how they choose to do so. So some states prohibit the sales of raw milk altogether. Some states permit on farm sales of raw milk. Some states will require specific permits for the production of raw milk that may involve inspections from your local department of agriculture or your local department of health. A lot of states
00:11:30
Speaker
don't allow the sale at all of raw milk, but do allow what's called herd share agreements. And that is one thing we do for our members on a very regular basis is draft these agreements so that consumers of raw milk who want the product actually become a partial owner of the dairy herd. So they buy a share in the herd and that way they're able to access products from their own herd and be able to access the raw milk in that fashion. That's fantastic.
00:11:59
Speaker
Yeah, it's a lot of fun. So we draft those agreements for our members, we will help them through the regulatory process where there are permit requirements, you know, but like, it's very so dramatically in terms of what you need to do to produce the product where you can sell it. Do you need additional commercial sales licenses? Do you need an additional food establishment license? Yeah, simply selling raw milk from a farm stand sounds like it should be pretty easy, but a lot of times it's a lot
00:12:27
Speaker
complicated than that. There's too many different agencies involved and it gets really complicated, but we will help them through the process. Our members and draft those kind of agreements for them.
00:12:37
Speaker
Yeah, so if you're a farmer listening to this today, this can seem a little bit daunting, but I also want to give you some confidence and assurance that Alexia and other lawyers at her organization can help you that you can jump through these hurdles. And we are fortunate at Barnard Door to support several dairies across the country who have built very vibrant direct to market milk sales, right? Where again,
00:13:00
Speaker
These are multi-million dollar farms now that we get to support. So it's definitely doable. I encourage you to go check out the Farm to Consumer Legal Defense Fund website. They also have a bunch of great resources there, specifically about milk, right? And you can get some surveys and get some good basic information there, but you'll want to definitely connect with an attorney to get some directive feedback.
Regulatory Differences in Raw Milk Sales
00:13:19
Speaker
Talk to me a little bit about this notion of selling on-farm versus selling off-farm. Why is raw milk treated so differently in this way?
00:13:27
Speaker
Yeah, that's a great question. I'm not sure I can really say why. I think the theory is if you leave it where it's produced and it's produced in a safe manner, so you can produce raw milk the way that a sanitarian is very safe, buying it, purchasing it directly from the farm in those conditions. I think the theory goes
00:13:45
Speaker
is safer than transporting it and the possibility of contamination once it leaves the farm. But again, I think that's partly theory because I see in our members, they're very careful to take particular measures in terms of food safety and the health of their herd, both on farm and then if they were to package and bring the product somewhere, right? Some states will allow it at farmer's markets as well. Some will allow it in retail. It really varies.
00:14:11
Speaker
And talk about packaging a little bit because I know this is something that comes up quite a bit too. It's just like the whole notion of like, Hey, do I need to buy like a commercial bottling machine or can I get by with Mason jars? I mean, we've seen the whole gamut of things that people use for selling milk. What are your thoughts on this one?
00:14:26
Speaker
Yeah, well, and, and again, the regulations, unfortunately run the gamut. Right. And so very often with some of the herd shares, for example, that, that we see the state actually requires kind of packaging. And it usually very often may require the share owner to bring their own containers.
00:14:44
Speaker
To make sure that they are sanitized and clean some states do the opposite and say to make sure that they're sanitized and clean only the producer can provide the containers right, it does vary some states will require some kind of bottling really, but the capping.
00:14:59
Speaker
So it's not like you have to use a particular bottle or you don't have to use a particular mechanized system of bottling, but some states do require some kind of automatic sealant that's used immediately after milking so that they can prove that it's been kept in the sanitary fashion.
00:15:17
Speaker
So it really varies dependent on the state and dependent on your local regulations, for sure. Got it. We recently released at Barnadora an e-book called Break the Dairy Syndicate and Sell Direct. What's some of your tips for success to farmers who are looking to make this switch? Is there perhaps looking at a big contract that they might have with one of the big dairy purchasers, I should say, versus trying to think about selling direct to people in their own community that they may know?
00:15:45
Speaker
What would be the first one, two or three steps that you think they should take before jumping in?
00:15:51
Speaker
before jumping in and selling raw milk in their communities. I mean, I think that first and foremost, double checking the law in your area, which of course we can help you with, so that you know, are you going to be producing it for sale? Are you going to need to do herd share agreements? How are you going to go about doing this, I think would be one of the first things. Then of course, if you're brand new to production, I know that we have had experts
00:16:15
Speaker
put together materials for us in terms of technical assistance. I know there's other places and organizations that provide that kind of technical assistance, but certainly it can be more difficult in terms of getting the customers and sort of finding people and building that business up. But what's nice about doing it direct to consumer is that there is no middle person, right? There is no middle company or processor, et cetera.
00:16:40
Speaker
So the small producers can really charge what they need to charge in the states where they're selling, what they need to in terms of input and maintenance of the herd, and they can increase those prices. And for the most part, what I have seen in experience is that consumers of raw milk
00:16:57
Speaker
are pretty dedicated, right? And they're consumers of raw milk because they see health benefits, because it tastes so much better. And they just think that it's healthier for your system in terms of the organisms that you're allowing to be in your system as opposed to killing off any pathogens. So my point is that they will pay the higher prices.
00:17:16
Speaker
And so, yeah, I think you can certainly ramp that up in terms of volume and have a successful direct consumer sales. In some places, people may need to come out to your dairy to get the products, but in a lot of places, you may be able to, say, bring deliveries to the cities or, you know, find another method of getting the bulk products to the consumers.
00:17:39
Speaker
Yeah, we have several great success stories of farms who did precisely what you said, which was they've got a major contract and selling through a major syndicate or even directly to a major grocer and maybe getting 60 cents on the dollar. I mean, 60 cents to 80 cents to the per gallon.
00:17:56
Speaker
flipped over to selling direct and now making $6 again, like literally a 10 fold increase in the price.
Barnard Door's Direct Market Success Stories
00:18:03
Speaker
And they're keeping all the margin in between, right? It's amazing. And if you're a farmer curious about that, by the way, Barnadore, we recently debuted a new program called our Connect program, where you can go online and connect with other farms who've done this successfully and hear how they've made that transition, right? And so we have dairies in Iowa, in Connecticut, other parts around the country, you could talk to who
00:18:26
Speaker
worked with the Farm Consumer Legal Defense Fund, figured out how to do it, and now have built a really thriving business and have more control, which is really cool. If I'm a farmer listening to this Alexia, what should I do next if I want to become a member of Farm to Consumer Legal Defense Fund? What does my membership look like? You talked a little bit about a hotline. Give me some sense of farm farmer. Give me the pitch. What should I do? How do I sign up? What's it cost me per year? You know, am I going to get charged egregious legal fees?
00:18:50
Speaker
So the answer to your last question is no, you're not going to get charged egregious legal fees. What's really great about it is we just charge for our farmer members, our small producers, we're charging an annual fee of $125 a year. We do this because we are determined to help all levels of farms be able to be in business.
00:19:10
Speaker
and not have their legal costs be the thing that drives them under. Obviously, we do other fundraising in addition to our membership fees, so for anybody listening, I will mention that. For farmers that want to join and get services, they can certainly go to our website, which is farm2consumer.org. They can call us at 703-208-FARM, which is 703-208-FARM.
00:19:38
Speaker
3276 and that is our regular number. Once a member becomes a member there is also a hotline number that we share for emergencies and that's typically going to be things like you know there's a problem with an inspector or there's a problem with the county in terms of licensing that kind of thing. But we really do encourage people to join and like I said we can help with simple contracts and then the idea is
00:20:01
Speaker
by joining and growing larger, we can provide those services without huge cost to the members.
Encouragement to Join FTCLDF for Support
00:20:08
Speaker
It sounds like such a great value add, Alexia. I just am so thankful for the work that you're doing at the Farm to Consumer Legal Defense Fund and supporting and serving farmers all across the country. And to our listeners here, like I said, we've referred several farms over to them and they've had nothing but great things to say. So we're really delighted, Alexia, to have an opportunity to partner more closely with you.
00:20:31
Speaker
And so I want to encourage our listeners to to tune in next time to hear more from Alexia, where we're going to dive into the nuances and laws associated with poultry operations, right? Because again, every type of farm product seems to be regulated differently. Poultry is no different. And if you have more questions, again, like Alexia said, go check out their website, you can go to farm to consumer.org.
00:20:52
Speaker
that's farm to consumer org all one word and you'll be able to go look and learn more about what they're doing and sign up as a member really encourage you to do that because even if you don't have immediate legal requirements just by becoming a member you're helping support their cause and if you haven't
00:21:07
Speaker
If you have any questions about Barnadore or any questions you want to talk to other farmers who've worked with the Farm to Consumer Legal Defense Fund and have built thriving businesses, you can go to barnadore.com backslash resources and you'll see a whole litany of great success stories of farmers like you who've been able to build a direct-to-market business serving their local community. So thank you everyone for joining us today and we look forward to seeing you next time on the Direct Farm Podcast. Thank you so much.