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0407 PD: Tossed out: Is your co-op next?

Published on 02 April 2007

Dairy producer Kay Carter recently signed an affidavit saying his farm wouldn’t supplement its 180 cows’ milk production by using rBST. Carter of Preston, Idaho, says the processor accepting milk shipped from his farm made the request for “rBST-free” milk last fall.

The processor gave him and other co-op members until the first of the year to make the change.

The transition wasn’t hard for Carter because he hadn’t used the product for years. Yet he’s heard that more than 160 of his dairymen colleagues in the co-op have since had to stop using rBST. Now more than three months after the co-op started processing milk from cows not supplemented with rBST, Carter says he’s yet to see much of a premium for the milk he’s produced.

“The consumers are asking for that kind of product out there. And someone is getting the money from it. Farmers aren’t getting it,” Carter says. “Who is the beneficiary of this product?”

Carter’s question is one that an increasing number of U.S. dairy producers are or may be asking as their co-ops consider not buying milk that has been produced by cows supplemented with rBST. Near the end of 2006, Dean Foods announced it would ask producers shipping to its processing plants to stop using rBST. Other smaller co-ops in the East have since followed the move.

Earlier this year, Starbucks decided to sell “rBST-free” milk in its coffee drinks. Also in January, California Dairies Inc., which processes 45 percent of California’s milk production, announced that producers shipping milk to the co-op must stop using the product or pay a “service charge” to transport the milk separately. Many of these announcements have been accompanied by statements about the need to meet consumer demand for “rBST-free” labeled milk as a reason for making the switch. Processors and retailers claim consumers don’t want milk from cows treated with the product.

A spokesman for Darigold, a Pacific Northwest dairy co-op with 600 members, said industry and independent research as well as consumer feedback “drove the decision” to offer some of its products labeled rBST-free.

“We focus on consumer demand. We are constantly reviewing what consumers want in the way of dairy products and adjusting our product line to meet that demand,” Randy Eronimous, director of marketing for Darigold, says.

Darigold has been labeling some products rBST-free for several years. All the co-op’s fluid milk processing plants except one currently accept only milk from cows not treated with rBST. Eronimous say the co-op’s current position on rBST use in milk production – keep both conventional and rBST-free labels – still gives both consumers and producers choices. Eronimous said some consumers may be making their food choice decisions on information or concerns that is not based in science, but that there is a clear consumer purchase pattern.

“Definitely, consumer demand is shifting based on health and wellness,” Eronimous says. “It’s about fat content, calorie content, nutrient-dense foods – which is great news for dairy.”

Yet others say advertising claims that describe the absence of a hormone or production method in order to differentiate milk are not healthy for the dairy industry.

Blair Thompson, consumer communications manager for the Washington State Dairy Products Commission, says the consumer research his commission gathers on an annual basis is showing red flags about how disparaging advertising that pits “good milk” versus “bad milk” is affecting consumer consumption.

A survey of 650 people last April showed that one in 10 people in Washington State weren’t consuming dairy products at all in their diet. That category of people has growth by 48 percent since 1998. The same survey asked consumers the following question: “Do you have any concerns about methods and practices used in raising dairy cows for dairy products?” More than a quarter of consumers answered, “Yes.” Of those that answered, “yes,” 41 percent said their concerns have had an impact on dairy product purchases and usage. The survey presents a clear take-home message, Thompson says.

“Regardless of how consumers express their anxiety – some may say it’s an environmental issue, some may say it’s a product safety issue – but the root cause of their anxiety is rBST,” Thompson says.

The commission’s research showed 52 percent of its survey respondents were aware of rBST. Thompson guesses that category of people will change significantly when the figures from this year’s survey are released.

“It’s basically the opening skirmish in what will probably be a longer drawn-out war over what kind of technologies producers are going to be able to use on the farm,” Thompson says. “rBST is one of the things that certain people would like to see stopped. But there are other things out there that other people would like to see stopped as well.”

Andrew Burchett, a spokesman for Monsanto which manufactures rBST under the trade name POSILAC, says a few activist groups have caught the ear of large companies like Starbucks with claims that consumers want rBST-free products. Decisions by these larger corporations have led to larger milk co-ops like California Dairies Inc. deciding to ask for milk from cows not supplemented with rBST, he says. These groups have created a false demand, Burchett says, by suggesting some types of milk are not safe. It’s a tactic, he says, that is not just exclusively targeting rBST.

“We’ve already seen signs that other technologies can be targeted and have been targeted in ad campaigns and on labels. In a competitive marketplace, where the name of the game is to differentiate based on misleading claims, what is next?” Burchett says. “At the end of the day, there is no difference from a safety or health standpoint between all the milk that’s available. It’s all healthy. We don’t want to be in a position where we are trying to say there is good milk and bad milk.”

Processors and retailers will eventually be those responsible for ending the “good milk versus bad milk” marketing campaigns, Thompson says. He hopes to help producers see the impact of absence-marketing claims and motivate them to get involved in the discussion.

“What our organization wants is a situation where organic milk, and no-rBST milk and conventional milk are free to compete for consumer patronage. But what we need to make sure of is that the marketplace is fair and free for all those types of milk to compete.”

Part of Thompson’s efforts include attending industry and trade events to present the commission’s research. Recently Thompson showed dairy producers at the Oregon Dairy Farmers Annual Convention in February a presentation from the commission’s research. One of his bullet points helps producers like Kay Carter who wonder who’s getting the profit from “rBST-free” milk. National survey data says nationwide most retailers are receiving $5 to $13 per hundredweight (cwt) for milk labeled as “rBST-free” while processors and dairy producers are receiving a premium of 3 to 12 cents per cwt.

Carter says his processor has handled the request and transition to milk production without rBST well. He gives them his highest marks for their service, trustworthiness and reliability. He thinks he may yet see a small premium for the milk he’s producing.

“I would just like a bottom line answer to who is the real beneficiary of this bST-free milk?” Carter says. PD

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