Where raw Milk Stands in Ohio

SMALL BIZ November 9, 2006, 2:25PM EST

By David E. Gumpert

The Raw Milk Wars Heat Up in Ohio

The state is aggressively pursuing farmers who make unpasteurized milk available to consumers. Will a Democratic governor declare a cease-fire?

Which state is toughest on small dairy farmers seeking to meet the burgeoning consumer demand for raw milk? It recently looked as if Michigan had the title, after its October sting operation on a farmer delivering raw milk and other products to members of a cooperative in Ann Arbor. That one-upped California, which the previous month had quarantined the state's largest raw-milk producer.

But Ohio may be tougher than both these states when it comes to policing distribution of raw (unpasteurized and unhomogenized) milk, moving aggressively over the last year-and-a-half against farmers who might make it available in any form—as pet food, via herd-share leasing programs, or even giving it away.

"They're treating raw milk like heroin or crack," says David Cox, a Columbus lawyer with the firm Lane, Alton & Horst who specializes in cases involving agriculture regulations. He now has six Ohio cases at various stages, and one common element in all, he says, is a sense of "vindictiveness" by the state's Agriculture Dept. (ODA). "I think there's competition among the directors of agriculture to see who can put raw milk out of business."

Coveting the Neighbors' Cows

Ohio's agriculture officials deny there's any vindictiveness behind their actions, but do allow that going after raw milk producers has become a high priority for the state and a hot topic among state agriculture officials. "When I go to meetings of my cohorts, it is the No. 1 issue that comes up," says Lewis Jones, chief of the agency's dairy division.

The crackdown appears to have begun in September, 2005, when some neighboring farmers complained that Arlie Stutzman's family dairy in Millersburg, Ohio, was distributing raw milk to consumers via a herd-share leasing arrangement. According to Jones, such complaints are increasingly common because farmers "are upset because [raw-milk producers] are getting three times the price [the conventional farmers] are getting."

So an agent from ODA visited the Stutzman farm pretending to be a building contractor, and asked to purchase a gallon of raw milk. According to the hearing testimony, before the agent's one-gallon plastic container was filled, "He inquired as to cost and was advised there was no charge, but he could make a donation if he so desired."

"Noble Purpose"

After the agent had received his milk, he "again inquired as to price. Stutzman replied, 'Whatever you think it is worth.' The investigator then gave Stutzman $2, asking, 'Is this all right?' Stutzman put the $2 in his pocket." Stutzman, an Amish farmer, "testified that he had been taught that if any person asks for food, one should give it if he has such."

The hearing examiner allowed that Stutzman's explanation "is a noble exercise. However, one cannot pursue this noble purpose by turning a blind eye to clear proscriptions set forth by the legislature." The penalty: revocation of his milk producer's license. A department spokesman says Stutzman subsequently applied for a new license and was granted it a couple months later. Presumably he will be more sensitive this time around to Ohio's stringent enforcement program.

Next to feel the brunt of Ohio's crackdown was Linda Fagan, a mother of eight children, who runs a 15-cow dairy in Macksburg, Ohio. She had decided five years ago after reading an article in a farming publication to sell raw cow's milk as pet food. She obtained all the licenses and approvals from ODA, and for the next four years sold her raw milk and cream at farmers markets, in containers labeled "not for human consumption."

Strong Suspicions

Her customers were mostly owners of calves, goats, and baby deer, though she doesn't doubt that at least a few purchasers were drinking the milk themselves. The new operation brought in about $300 a month in revenues, about 10% of farm income. The remainder came from sales of milk to conventional milk processors, along with vegetable sales.

Last February, the ODA inspector who visited for what she expected was her routine annual inspection, for no obvious reason issued a stop-sales order, and in April the agency revoked her registration to sell pet food. According to Jones, the ODA determined that farmers like Fagan were using pet food sales as a ruse to get around the prohibition on raw milk sales.

Linda Fagan says that until she was put out of the pet food business, "I never realized milk was such a big deal." She hadn't heard of controversies about raw milk. "I've grown up drinking raw milk and never considered it to be a threat," she says.

Losing the Farm

And probably the most serious case, from the dairy's perspective, involves Carol Schmitmeyer, who with her husband and five children runs a 300-acre farm in Versailles, Ohio. A year ago, she established a herd-sharing arrangement to make raw milk available to about 150 people in her area who were eager for the product. The lawyer who drew up the papers had previously worked for the ODA, she says, and thus she assumed the arrangement would pass muster with the agency.

It did, until this past September, when the ODA demanded in a hearing that her dairy license be revoked. The hearing examiner agreed, declaring that the herd-sharing agreements were "a thinly veiled attempt to evade the prohibitions against selling raw milk" in Ohio, and ordered her license be revoked.

Schmitmeyer is appealing the decision in court and retains her license in the interim, but she says a negative decision could be catastrophic. "If they take our license away, we lose the farm." While she could, like Stutzman, apply for a new license, there's no guarantee it would be granted. According to her lawyer, Cox, she "runs the risk that they could reject it in that she is a violator."

Going Underground

So intense is ODA's campaign against raw milk, the agency earlier this year even sent a written warning to Organic Pastures Dairy, the Fresno, Calif., dairy that tangled with California agriculture officials—against selling raw milk via mail order to Ohio residents. ODA's spokesperson readily acknowledges that it has no jurisdiction in California.

Mark McAfee, president of Organic Pastures, replied to the agency that the FDA doesn't prohibit interstate sales of his raw milk, since it's labeled as pet food, and then added this needle, "Please understand that there are literally thousands of people drinking raw milk in Ohio in the underground markets…this is only getting bigger and bigger."

As McAfee suggests, the ODA, along with other states, appears to be trying to hold back a tidal wave of demand. Food and agriculture officials are arguing that raw milk is dangerous, but too many consumers feel differently, seeing raw milk as a highly nutritious food capable of building their children's immune systems and relieving symptoms of ailments from asthma to autism.

New Regime

When consumers want something so badly, they will pay enough that farmers will take the risk of supplying them with it, and in that sense, the comparison made to heroin and crack holds true.

One glimmer of hope for Ohio's enterprising dairies is Tuesday's election, which saw a Democrat, Ted Strickland, voted in as governor. According to Cox, this means that ODA's raw milk policy will almost certainly be replaced come early next year. It could also give impetus to stalled Ohio legislation that would allow farmer-to-consumer distribution of raw milk, such as via herd-sharing arrangements.

In the meantime, the cat-and-mouse game among farmers, agriculture inspectors, and consumers continues…all over milk.

David Gumpert provides updates on this issue at his blog http://www.thecompletepatient.com

http://www.businessweek.com/smallbiz/content/sep2006/sb20060928_865207.htm