- Stonyfield co-founder Gary Hirshberg has announced The Northeast Organic Family Farm Partnership, a program that aims to provide support and long-term solutions for 135 small, family-owned organic dairy farms that are at risk due to supply contracts set to expire next year with Danone's Horizon Organic and New York-based Maple Hill Creamery.
- The partnership is encouraging consumers to pledge to buy one-fourth of their weekly dairy purchases from 35 brands — including Stonyfield and Organic Valley as well as smaller, local brands — that have committed to increase their purchases of milk from Northeast organic family farms. It is also inviting grocers, restaurants, cafeterias and other outlets to take part by stocking the participating brands and growing their 2022 organic dairy purchases. Retail partners will be able to display a special logo at the point of sale and online.
- The program led by the co-founder of Stonyfield, which was purchased by French dairy giant Lactalis in 2017, highlights the competitive and supply dynamics in organic dairy as large CPGs like Danone have entered the segment, which has only grown in popularity over the pandemic.
Last year, 89 farms located between New York City and Bangor, Maine, received contract termination letters from Horizon, and another 46 from Maple Hill. Large organic dairy companies are now mostly sourcing their milk from big farms in the Western U.S. because it is much less expensive, The New York Times reported. Danone North America Vice President of Government Affairs Chris Adamo told the Times that a scarcity of truck drivers was a significant factor in the decision for the company to leave the Northeast.
The result of Danone's exit alone, according to the Northeast Organic Farming Association, is that more than 10% of the region’s organic dairy farms would lose their market for milk, since other organic processors have a limited capacity to take on new producers. Small farmers have financially relied on sourcing to large organic companies since the 2000s, according to the Times, and 135 farms are at risk of closure once the Horizon and Maple Hill contracts come to an end.
As pressure mounted on Danone, the company announced a "Northeast organic dairy transition plan" in December that extends the contracts and offers transitional payments to the family farms as well as financial consultation services. The milk contracts will now end on Feb. 28, 2023. Adamo told Mainebiz that the company has talked to farmers and government officials since its initial decision. “Through those conversations, which were very productive conversations, we listened and learned,” Adamo said. “For us, it’s been a reflective process. We feel this help reflects the values of the company."
Maine governor Janet Mills said that the plan was a "modest but welcome development," adding that there is more that must be done to protect the farms.
In late 2021, a task force was formed by 27 organizations including state departments of agriculture and dairy experts to help farmers impacted by the loss of the Horizon and Maple Hill contracts. In December, the task force sent a letter to U.S. Agriculture Secretary Tom Vilsack asking for federal assistance. One specific request from the group is to change a law in the National Organic Program called "Origin of Livestock" that allows farmers to transition their dairy-producing animals not raised organically to becoming "organic." According to the Organic Farmers Association, some dairy farms have not complied with rules of how organic dairy must be produced, putting followers of the law at an economic disadvantage. Closing this loophole would level the playing field between smaller players and large dairy farmers, supporters told Vermont news outlet VTDigger.
The Northeast Organic Family Farm Partnership has a range of participants from the industry and state government, including a representative from Maine's Department of Agriculture and foodservice company Sodexo. By also harnessing consumers in the effort, the partnership could gain traction.
Buyers of organic associate these products with social benefits and ethical practices, according to an academic review published in the Journal of Retailing and Consumer Services. In fact, B Lab, a nonprofit that grants B Corp recognition to companies "using business as a force for good through their commitment to social and environmental performance, accountability and transparency," has asked Danone North America to disclose the Northeast supply situation in its public profile for transparency, The Republican Journal reported. In 2018, Danone North America became the largest company in the world to achieve B Corp certification.