Farm Legal Series #1: Raw Milk Sales Explained
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.
-
James: 0:26
Welcome everyone to the Direct Farm Podcast. We've got a great conversation for you today with the Farm to Consumer Legal Defense Fund or the FTC LDF. 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, artisinal food producers, and their consumers. This is 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 Kulwiec, 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 and her experiences inspired her interest in US agriculture and 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.
Alexia: 1:30
Thank you so much to Barn2Door for having us. We're really excited to be here. I appreciate it.
James: 1:35
Well, awesome Alexia. Well, let's get started first, for our listeners, tell them what the Farm to Consumer Legal Defense Fund is in how it came to be.
Alexia: 1:43
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, you know, 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, the food system is 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.
James: 2:29
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 owned farms. That makes somewhere between 50 K and $5 million and yet, they produce 75% of the food in America. And so, 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 this mission, what's your background beforehand?
Alexia: 3:02
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 an 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. What really attracted me to Farm to Consumer Legal Defense Fund is one, it's 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 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 that sounds like a lot. And, you know, it used to be 6 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.
James: 4:33
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 their 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 kinda like the organizational structure. Cause you guys work with farmers in every state, right? So, if somebody signs up to become a you know, a member and support the farm to Consumer Legal Defense Fund, 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?
Alexia: 5:10
Sure. And first, if I could explain if anyone takes a look at it we have a couple of different kinds 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. 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 us through your membership account that we have online, you can simply email us. So once you're a member, 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. 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 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, some doing work that we compensate if they're going to be doing actual litigation for us, that kind of thing. 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. And 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.
James: 6:58
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. 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. Cause obviously dairy is highly regulated. It varies dramatically state to state. And I think most recently in the fall we'd saw that horizon organics canceled 89 dairy contracts throughout the Northeast, Vermont, Maine, New Hampshire, and several dairies in New York as well. Now, a lot of these producers have undergone extensive audits, documentation, all kinds of processes, just to be operating. Can you speak just a little bit about dairy generally? Like how these laws around dairies vary from state to state? Because obviously I know 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.
Alexia: 8:04
Sure. And first I'll just say that I'll speak, there's kind of a 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. 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 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 dealers license. They'll probably be subject to a number of inspections regarding health of the animal. Remaining disease free. If you're a producer for horizon organics, most likely your, 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. 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. And 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 of and making sure that their product is safe.
James: 10:09
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, right. Particularly in the case of raw milk What are some of the ways in which, you know, the Farm to Consumer Legal Defense Fund 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, they're going to vary quite a bit, but what are the issues particularly there if someone's thinking about getting into this?
Alexia: 10:41
Well, a lot of issues and ways that we can help. Issues first and formost are that the interstate sales of raw milk is prohibited. The FDA prohibits the interstate sale.
James: 10:52
So that means selling across the state lines. Interstate you can't sell.
Alexia: 10:56
Correct. Which in the Northeast does get dicey because you get in and out of states pretty quickly. Right. 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 don't allow the sale at all of raw milk that 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 became com a partial owner of the dairy herd. So they buy a share in the herd and that way they're able to access product from their own herder, you know, and be able to access the raw milk in that fashion.
James: 11:58
That's fantastic.
Alexia: 11:59
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, it varies 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, just simply selling raw milk from a farm stand sounds like it should be pretty easy, but a lot of times it's, it's a lot more 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 kinds of agreements for them.
James: 12:37
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 Barn2Door to support several dairies across the country. Who've built, very vibrant, direct to market milk sales, right? Where again, these are multi-million dollar farms now that we get to support. So it's definitely doable, 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 directed feedbaack. 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?
Alexia: 13:27
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 a way that a sanitary and is very safe. Buying it, purchasing it directly from the farm in those conditions, I think this area goes, 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.
James: 14:11
And talk about packaging a little bit. Cause 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?
Alexia: 14:26
Yeah. Well, and again, the regulations unfortunately run the gamut. Right. And so, very often with some of the herd shares, for example, that we see the state actually requires. Kind of packaging and it usually, it very often may require the share owner to bring their own containers, 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, not bottling really, but the capping, right? 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. So it really. It varies dependent on the state and dependent on your local regulations for sure.
James: 15:23
Got it. We, we recently released at Barn2Door, an ebook 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 as there may be 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 now, like what would be the first one, two or three steps that you think they should take before, you know, jumping in.
Alexia: 15:51
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 put together materials for us in terms of technical assistance. I know there's other places in the 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. 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 experiences that consumers of raw milk are pretty dedicated, right? And they're consumers of raw milk because they see health benefits because it tastes so much better. And, 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. And so, yeah, I think you can certainly ramp that up in terms of volume and have a successful, direct consumer sales. And 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 products to the consumers.
James: 17:39
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 PR per gallon. Flipped over to selling direct and, and now making $6 account, like literally 10 fold increase in that and the price. 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, Barn2Door 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. Who worked with the Farm Consumer Legal defense and figure it 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?
Alexia: 18:37
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? 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 to be able to be in business 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 FarmtoConsumer.org. They can call us at 703-208-FARM, which is 703-208- 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 by joining and growing larger, we can provide those services without, huge costs to the members.
James: 20:07
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 a opportunity to partner more closely with you. And so I want to encourage our listeners too, 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 FarmtoConsumer.org. That's farmtoconsumer.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. I really encourage you to do that because now even if you don't have immediate legal requirements, just by becoming a member, you're helping support their cause. And if you have any questions about Barn2Door or any questions, want to talk to other farmers worked with the Farm to Consumer Legal Defense Fund and built thriving businesses. You can go to Barn2Door.com/resources, and you 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.
Alexia: 21:33
Thank you so much.