Staff Writer
HOULTON — Organic farmers in Aroostook and Washington counties are among the latest to feel the brunt of an unrelenting downturn in the current troubled economy. H.P. Hood, one of the largest dairy operators in the United States with more than $2 billion in yearly sales, notified eight farmers in northern Maine that Hood is canceling their contracts for certified organic milk. Other Maine farmers supplying the brand are being asked to cut back production. “They recruited us so hard,” says Vaughn Chase of Chase’s Organic Dairy Farms in Mapleton who contracted with Hood on an annual basis starting in 2006. He earns a premium for organic milk, $30 for 100 pounds of milk, as opposed to the $12 per 100 pounds for conventionally produced milk. That’s because the USDA certified organic label means no chemical fertilizers or pesticides and no chemical growth hormones or antibiotics have been used in the process including food for the cows. Achieving certification can take up to three years.
Last year, Chase says he bought 114.77 tons of organic grain from Agri-Cal, Inc. in Houlton. That along with sales to two other farmers accounts for about 10-15 percent of the company’s feed sales according to owner Douglas Callnan who says organic feed is about twice the cost of its regular counterpart. “I was really taken aback,” says Callnan of Hood’s decision. “They’ve fulfilled all the requirements to become organic farmers and now they are just being dropped.”
In August, Chase’s contract expires and will not be renewed. Lynne Bohan, Hood spokesperson, says the softening in organic milk sales coupled with increased transportation costs created a “perfect storm” forcing Hood to cancel contracts with northern Maine farmers. She calls it a classic case of supply and demand. Bohan did not indicate the tipping point for the decision or anticipation that the double-digit growth experienced over the last few years would bounce back. However, she says she will direct inquiries from other potential processors to the farmers who have been dropped.
Different farmers
have differing views
At Oliver Farm in Hodgdon, owner Matthew Oliver says his 125 acres is totally devoted to producing organic milk and he expressed a hopeful view about the future after his contract ends in June 2010. “Something else will come up. This is America, right? Anything like this just provides for further opportunities as far as I’m concerned. It’s up to the individual to make something out of a situation like this.”
David James, owner of James Pond Dairy in Charlotte weighed the difference between organic and conventional farming and the potential lost income with a philosophical view. But, he does say Hood was not fair with the farmers after indicating a five-year commitment that turned out to be less than three. “They should have dropped the price for everybody. And, if they wanted to squeeze us out, let us go out on our own.”
At least, he says, he won’t have to buy the expensive grain although he’ll pay the cost of transportation which previously was picked up by Hood. Still, it represents a loss of potential income, but not a big drop when his contract expires in mid-December. He says he hopes to convert his 35 acres of pasture and 80 head of dairy heifers to conventional farming. “They were right at you to get going [organic],” says James who borrowed money to buy 20 organic cows at about $2,000 each after selling his other non-organic cows.
America went green
and organic
While organic farming is nothing new, it only enjoyed a small cult following for the last two centuries. The natural movement increased rapidly in the first half of the 20th century and really started to hit its stride toward the latter part of the 1900s averaging 20-25 percent growth each year reaching $33 billion in sales by 2005. In 2006 organic dairy sales, alone, accounted for $2.66 billion and, of that, about half was for organic milk, according to the Organic Trade Association. Although consumers are being cautious lately with their greenbacks they still buy green. Barbara Haumann, press rep for the association, reports anecdotally, “consumers buy a lot of organic milk.”
The investment in going organic can cost upwards of $100,000 or more. Chase says suddenly losing that premium price for organic milk is a problem since he based business decisions and made purchases to go organic on his 600 acre farm with 110 cows. Shifting back to conventionally produced milk and losing about two-thirds of his income he says is a blow to his balance sheet in covering outstanding debt from his conversion to organic farming.
The farmers are trying to find another outlet for their products and say they believe there is a real interest in Maine-produced farm products. They even expressed hope for a deal with Houlton Farms Dairy. However, in a statement to the Pioneer Times, owner Alice Lincoln expressed sympathy but little hope saying she had a phone contact with a representative from Maine Farm Bureau. “While we are sympathetic to those farms affected by H.P. Hood’s decision, it would not be financially viable for Houlton Farms Dairy to process and market organic milk at this time. In these trying economic times our primary concern is with maintaining and growing the market for Houlton Farms Dairy products and to ensure that our milk producers are able to adequately sustain their farming operations.”
