Monday, August 29, 2022

Danone organic disaster

A year after Danone pulled the plug on 89 organic milk producers in Vermont and area, most remain far from recovered.

The United States Department of Agriculture gave $20 million, but so far Danone and its owner, Nestle, have not matched that. Nestle is one of the largest food companies in the world.

Ed Maltby, spokesman for the 89 farmers, said Organic Valley has taken on 65 at five per cent below market price, 15 have folded and four have signed on with Lactalis Group. At least one has gone back to conventional milk production.

Twenty-seven are members of Northeast Dairy Task Force lobbying on behalf of the farmers. Maltby is its executive director.

Maltby said oversupply in the region, combined with spiralling producer and infrastructure costs, has made the journey less than straightforward, with some farmers having to make costly upgrades to their farm infrastructure and others yet to find new buyers for their produce.

And it’s a very tight market, he said.

 “For the past four years, organic dairy farmers have been paid an average of $31 per hundredweight with production costs averaging $35-$37. This has led to cost-cutting and lack of investment in farm infrastructure,” he said.​

Danone-owned Horizon Organic is the largest supplier of organic dairy milk in North America.

Maltby said “the effect on the farms that had their contract cancelled was traumatic and devastating, not only to them but to the regional community.

“The decision was made purely on the logistics of transporting milk from farm to the processor that could package UHT milk. Danone, despite the pledges of supporting [the] environment and the local community, did not take into account the effect on the farms.

“The most recent economic downturn coupled with drought conditions have turned a crisis into a near emergency and Danone has the resources to live up to their commitment to invest in the region. It’s time they embody their social mission and do right by the Northeast rural communities they have impacted, giving these farmers a future.”​