Maine organic milk company struggles as money runs out

By Sharon Kiley Mack, BDN Staff
Posted Sept. 01, 2010, at 2:11 p.m.

MACHIAS, Maine — A grand agricultural experiment — a Maine farmer-owned milk company — is close to folding and will suspend milk production this weekend as its principals scramble to find investment funding.

MOOMilk, which stands for Maine’s Own Organic Milk, processed milk Wednesday but will suspend production Sunday on skim and 1 percent milk, as a variety of reasons have combined to force the business toward closure. The company’s cash flow is so low that it can only purchase 2 percent and whole milk cartons.

“We are out of money,” David Bright, MOOMilk’s secretary and one of its founders, said this week.

Although the company began with 10 member farmers from Washington, Aroostook and Kennebec counties, that number has fallen to six, threatening the company’s ability to produce enough milk to remain sustainable.

One has opted to produce cheese, one is currently shipping elsewhere but intends to rejoin MOOMilk later this year, one shifted to conventional milk, and one sold his herd to family members who opted to shift to conventional milk.

Economic pressures also took a toll: The retail price of organic milk can be twice as much as conventional milk.

MOOMilk was formed last year after Hood LLC, citing a soft market, did not renew its contracts with 10 Maine organic milk producers. There was no other organic producer willing to pick up the farms, so the farmers banded together and created MOOMilk.

Smiling Hill Farm agreed to process the milk — 17,000 or more pounds a day — and Oakhurst Dairy in Portland has been distributing it to more than 100 stores in Maine and New Hampshire.

“We have less than $1,400 left in the bank account,” Bright said Wednesday. He said the company was making enough to pay the farmers but not enough to pay its overhead. MOOMilk owes money to the hauler, the processor and the distributor.

“We’ve just not been able to produce or sell enough to make a profit,” Bright said.

As for the remaining farmers — three in Aroostook County and three in Washington County — Bright said they are paying the trucker, Jason Schoppee of Holden, out of their own milk checks to deliver their product to conventional dairies.

He said the Aroostook County farmers had an opportunity to ship to another market but they were aware that if they did so, no one would service the Washington County farms. The three — in Edmunds, Charlotte and Perry — are too far out of the conventional trucking loop for it to be profitable to haul their milk.

In an act of solidarity, the three Aroostook farmers agreed to stick by the Washington County farmers while a solution is being worked on.

“This is a stressful time,” Aaron Bell of Tide Mill Farm in Edmunds admitted Wednesday. “We are all hopeful we can work something out.”

Bright said company officials have been working with the Maine Department of Agriculture, the Maine Organic Farmers and Gardeners Association, FAME, and state Sen. Kevin Raye, R-Eastport, to find a solution to the cash flow problem, including seeking private investors.

As recently as Aug. 1, Bright was optimistic about sales but acknowledged then that an additional 3,000 gallons a week needed to be sold to put the company in the black.

Correction: An earlier version of this story required clarification. The company has has not suspended production of 2 percent and whole milk, as Bright originally told the Bangor Daily News. Instead, it will suspend production of skim and 1 percent milk. MOOMilk is now sold in 100 stores throughout northern New England, not 49. Bright also wanted to clarify the reasons that four of the original 10 farmers are no longer contributing to MOOmilk.

http://bangordailynews.com/2010/09/01/business/maine-organic-milk-company-struggles-as-money-runs-out/ printed on January 29, 2015