BAR HARBOR, Maine — Last February, a group of Maine organic dairy farmers thought that their businesses as they knew them had come to an end. Citing a soft organic market, a depressed economy and the great distances to serve organic milk producers in far-flung Washington and Aroostook counties, 10 farms were given their pink slips by H.P. Hood Inc.
The farmers were flabbergasted. Each had a contract, and all said they had made substantial investments in their farms to convert to organic.
But this is rural Maine, and with true Yankee ingenuity, the 10 farmers banded together to find a solution. Through a cooperative agreement among the farmers, private investors, Smiling Hill Farm in Westbrook, Oakhurst Dairy in Portland, the Maine Organic Farmers and Gardeners Association, the Maine Farm Bureau and the Maine Department of Agriculture, a new company has been launched: MOOMilkCo., short for Maine’s Own Organic Milk Co.
“We have created a company using all the different parts already existing in the state,” MOOMilk’s general manager, Bill Eldridge, said this week. “This is a real Maine story. I have been totally astounded as to the level of cooperation and partnership in this state.”
Milk should start appearing in stores in early November, taking only 96 hours to get from the cow to the shelf.
“This is a terrific example of what can happen when all members of the Maine agricultural family pull together,” said David Bright, a member of MOOMilk’s board of directors. “Beyond that, the support from the industry and the public has been outstanding.”
Smiling Hill Farm, which was processing milk only twice a week, is making significant investments in it facility, putting in a whole new processing line and ramping up to bottle MOOMilk four days a week. Oakhurst has agreed to put MOOMilk on its trucks and distribute it throughout Maine and Massachusetts. Hannaford supermarkets have offered to put MOOMilk on the shelves of all their Maine and Massachusetts stores. Jason Shoppee, who previously had picked up the milk at each of the orphaned farms, is picking it up again.
The road that led the farmers to the new company was not an easy one, nor one without rejections.
Eldridge began working on the project about 18 months ago with Bright and Rommy Haines of the Maine Farm Bureau.
“We were concerned that the situation the orphaned farmers found themselves in was just the tip of the iceberg,” Eldridge said. “We know that the big organic producers such as Horizon and Hood are driven by the corporate line and profit. Our concerns were that the rest of Maine’s small farms are just as vulnerable.”
The 10 dropped farmers already had approached the other organic processors serving the state — Horizon, Organic Valley, Stonyfield — and were rejected. They also worked hard to get Hood to take a second look.
In a letter obtained this summer by the Bangor Daily News, Paul C. Nightingale, senior vice president of H.P. Hood, defended Hood’s position to one of the farmer’s attorneys.
“It is true that at the time we began our organic milk program, Hood had high hopes of growing,” Nightingale wrote.
He said that since the signing of the farmers’ contracts, however, “a constellation of events has occurred that have all but eliminated the economic incentive for farmers to convert to organic production in Maine, and which make the contractual arrangements we had with your clients uneconomic.”
Eldridge said his team approached Houlton Farms Dairy, Grant-Garelick and Oakhurst, to see if any had the capacity to take on an organic production line. No one had the room.
But Smiling Hill Farm in Westbrook was producing only its own milk two days a week and had extra capacity. By April of this year, the group knew that it had forged an agreement for production.
“Then we went back to Oakhurst and they jumped right in and said they would be happy to distribute it, put it right on their trucks,” Eldridge said.
The team began meeting with the farmers, and MOOMilk was created. “In the farmers’ minds, converting to conventional was a death sentence. Going out of business was a death sentence. This was the only and best answer,” Eldridge said.
The details of packaging, finances and a business plan were worked out, and “now we need customers,” Eldridge said.
Every study done on the buying-local market, in Maine and nationally, has overwhelmingly revealed that when consumers can find local products, they will buy them to support local agriculture.
“We surveyed 40 to 50 percent of the stores from one end of Route 1 to the other and they all said they would be glad to take it,” Eldridge said of the milk. Associated Grocers of Maine said it would carry it. Hannaford and dozens of health food and natural stores also joined in.
“We are currently talking with Shaw’s Supermarkets and Wal-Mart,” Eldridge said.
The new company, MOOMilk, is an L3C company — a legal name for a low-income, limited liability corporation. Farmers could, but were not required to, become members at $250 per unit of membership.
The company elected a board of directors, hired Eldridge as general manager and began seeking investors. One organic company, Stonyfield Farms, made a generous donation to the startup, Eldridge said. “They believe in local and sustainability.”
Oakhurst also agreed to buy the organic milk from the farmers as conventional milk, until MOOMilk is ready to launch.
MOOMilk’s directors include Vaughn Chase of Mapleton, Aaron Bell of Edmunds, Richard Lary of Clinton, Bright, Haines, and Russell Libby, executive director of MOFGA.
The company is in the process of raising $500,000 in equity and has commitments for about 35 percent of that. In addition, MOFGA and the Maine Department of Agriculture have provided some seed money.
“This could be a business model for many other Maine agricultural businesses,” Eldridge said. “This milk is a crossover product — from the farm to the consumer, quickly, and in an easily recognizable package. Pricing will be pretty straightforward, at standard organic prices. We estimate a half-gallon will be about $3.99. And when you see that truck with the MOOMilk logo on its side roll through your town, you will know it is your neighbor’s product.”
“What put this effort over the top was the support we’ve found everywhere we’ve gone for locally produced and processed milk,” Bright said. “Consumers want it and the retailers are welcoming our milk into their stores. Things looked pretty dark not too long ago and our farm families have placed an awful lot of trust in us. Bill [Eldridge] has done an incredible job with the nuts and bolts of the operation. It’s just been really exciting to see this all come together.”
The farmers are nervous about the initiation of the new company, but are excited about its goals. MOOMilk will begin by paying the farmers $24 per hundredweight with a goal of $30 cwt. “Our long-term goal is $40 cwt.,” Eldridge said.
“I’m nervous,” Dexter dairy farmer Mark McKusick admitted this week. “But we are so optimistic. I hope people realize this is fresh, local milk. It’s not ultrapasteurized. This milk is from us, right here in Maine.”