Contract talks pose tough choices for former MOO Milk dairy farmers

A variety of MOO Milk products are on display in this December 2010 file photo.
Sharon Kiley Mack
A variety of MOO Milk products are on display in this December 2010 file photo.
Posted July 02, 2014, at 1:41 p.m.
Last modified July 02, 2014, at 7:13 p.m.

PORTLAND, Maine — Leaders of the shuttered Maine’s Own Organic Milk met Wednesday with Oakhurst Dairy representatives to discuss a deal that could revive the MOO Milk brand and provide a long-term contract for some or all of the cooperative’s 12 member farms.

But by the end of the day, the talks yielded only a promise of hard numbers for the farmers to consider during a noon conference call on Thursday. It’s a tough timeline for organic dairy farmers such as Tom Drew of H.B. Farms in Woodland, who said he’s got another offer to mull over from Wisconsin-based Organic Valley. By the end of Thursday, he plans to sign a contract.

“It’s time for me to get that contract and take that to the bank,” Drew said.

The day before he got the call that MOO Milk would stop production, in mid-May, he had purchased cattle and was planning out yearly expenses he would cover with a farm loan, which he had to withdraw.

“If we had anything open or something in negotiation, that went out the window because as of May 16, we didn’t have a contract with a long-term enough loan,” Drew said.

The company’s leaders had worked out a 60-day deal with Stonyfield, which agreed to buy organic milk from its member farms, but Drew said that didn’t stave off the lingering chill from 2009, when loss of an organic milk contract with H.P. Hood led farmers to start MOO Milk.

“My concern as a producer way up here in Aroostook is that we watched Hood come in, and that failed,” Drew said, leading to a question he plans to ask during the conference call Thursday. “What makes Oakhurst think they can make it work?”

A representative from Oakhurst, which was acquired by the national cooperative Dairy Farmers of America in January, was not immediately available for comment late Wednesday.

Rommy Haines, a past director of the Maine Farm Bureau who helped launch MOO Milk, said in a phone interview that the presentation of terms on Thursday stands to show which of the farmers will stick together and which could stay together through a deal with Oakhurst.

After two months without a long-term contract, Drew said the possibility of splitting up the former MOO Milk farmers is a matter of dollars and cents for him and others.

“We’ve got to move on, and if that’s in different directions — as painful and awful as that sounds — it needs to be done,” Drew said.

Haines, who participated in some of the calls with farmers Wednesday, said that by the day’s end, most of the farmers agreed to hear out Oakhurst’s proposed terms on Thursday before signing any other deals. But the pressure is on.

“At least a couple of the farms need to sew things up here before the weekend,” Haines said.

That’s the case for Drew heading into tomorrow’s call.

“I’m going to take on that conference call at noontime and take the best offer on the table for this farm,” Drew said, noting that the farmers haven’t been directly involved in the Oakhurst negotiations so far.

Some are in separate discussions with Colorado-based Horizon Organic, and another Aroostook County farmer has been courted by Organic Valley.

Drew said the end of MOO Milk’s four-year run was difficult to endure, but he doesn’t think the foray into building an organic milk cooperative in Maine was for naught.

“I hope the fact that it didn’t work doesn’t interfere with the optimism needed for that ambitious entrepreneur to build a future for themselves,” Drew said. “We did ride right into the wild west with this … and we set an example for up-and-coming business in the state.”

In 2010, the company organized as an L3C, a low-profit designation that allowed it to collect donations to support its operations. Until May 2014, MOO Milk processed its own organic milk using equipment decommissioned by Oakhurst and located at Smiling Hill Farm in Westbrook.

Repeated issues with the equipment led to quality control problems that CEO Bill Eldridge at the time said the company was unable to overcome.

“We were done in not by the marketplace but by the fact that when we got started, we couldn’t afford anything and had to put together a virtual company with whatever we could get for equipment,” Eldridge said. “And, eventually, old equipment just dies.”

The company had hoped to secure enough funding for a new packaging facility in central Maine after an engineering feasibility study showed the company could be profitable with construction of new processing equipment, costing tens of millions of dollars.

But with its existing equipment “on its last legs,” continuing to rely on it to process about 8,000 gallons of milk weekly made that investment too large of a risk.

In late May, the Maine Farm Bureau started fundraising through its nonprofit disaster relief fund to help support the farmers.

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