Organic Dairy Farmers Win a Six-Month Reprieve From Horizon | Off Message

Organic Dairy Farmers Win a Six-Month Reprieve From Horizon

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Holstein cow - UNIVERSITY OF VERMONT
  • University of Vermont
  • Holstein cow
The French dairy giant Danone has agreed to extend its contract with its Vermont organic dairy farmers by six months to give them more time to find alternatives for selling their milk.

Danone announced in October that it would cut ties with 28 Vermont organic farmers in August 2022, leaving them with nowhere to sell their milk. The decision included 89 farms in the Northeast that were under contract with Horizon, the organic label owned by Danone.

Under the new agreement, which was confirmed by the office of U.S. Rep. Peter Welch (D-Vt.), the farmers will receive a six-month optional extension of their contracts, to February 2023, and will also get a small boost in payments for the last six months of the contract.



Welch’s office on Monday hailed the extension as good news but added that Danone — which recently applied for B Corp status, a designation for companies that have pledged to hold themselves to high standards of purpose, accountability and transparency — could do more.

When it announced in October it wouldn’t renew the contracts, Danone said it was too costly to ship milk to the nearest available organic processors, in Virginia and near Buffalo, N.Y. The news spurred an outcry among dairy farmers and groups that support them.

Danone reported revenues of $27 billion in 2020, Welch said then.

“Danone knows that leaving our farmers behind is wrong, and they have the capacity to provide real support for the folks that have done so much for them,” Welch’s office said in a statement Monday. “It’s why they have adjusted their exit strategy in the face of public pressure.”

Danone's Chris Adamo, president of government relations for the company's North American business, said in a letter Monday that the company will keep working to address the challenges faced by the industry.

"This support is designed to ease the impact of our transition on the organic dairy community and is motivated by a genuine desire to create a greater window of opportunity for the farms, industry, and governments to address the systemic challenges facing organic dairy in the Northeast," Adamo said.

Vermont’s dairy farmers have been struggling for years in the face of declining milk prices and consolidation that puts smaller operations at a disadvantage. Some are also coming under increasing pressure from regulators who link their practices to phosphorus pollution.

The financial pressure has taken a toll. The number of cow dairy farms in Vermont dropped from 4,017 in 1969 to just 636 in 2020, according to a report  the state auditor’s office released in May. The state Agency of Agriculture now says it has 700 dairy farms, including ones that milk goats and sheep.

Many of the state’s dairy farms get financial help from an array of programs such as tax exemptions, grants, services and technical assistance. The auditor’s report estimated Vermont spent more than $285 million on programs and policies that support the dairy industry, or address related environmental impacts, between 2010 and 2019.

But the farms also make up about 65 percent of the state’s agricultural sales, support struggling rural areas, and fill an important role in Vermont’s culture and image. In a letter to Danone in October, Welch and other members of Congress said the organic farms Danone planned to cut ties with had established themselves as environmental stewards and helped support rural economies.

“By all accounts, your decision to sever the contracts of these 89 farms was one based solely on maximizing profits, regardless of the devastating consequences for the families and communities you cast aside and despite the reputational benefits and profit you gleaned from their work,” the letter said.

The Vermont Agency of Agriculture is working with other northeastern states to come up with a way for the Horizon farmers to process their milk closer to home or provide transportation to the organic facilities that are available. Ag officials from the northeastern states are also due to present some proposals for bolstering dairy overall to the U.S. Department of Agriculture this week.



“There has been a lot of energy around trying to find a solution,” Agriculture Secretary Anson Tebbetts said Tuesday of the Horizon contract. “Giving the farmers an extra six months to work on alternatives gives everybody a little breathing room, and with our task force and what we will present to USDA, maybe that will help in the long run.”