The Danone/Horizon and Maple Hill Contract Dump: The Facts

By Ed Maltby, Executive Director, NODPA

From the beginning of the contract terminations (since July 2021) by these two companies, there has been a shortage of accurate information about the number of farms, their locations, and the volume of milk involved. For Maine and Vermont this was public information. In New York, due to state legal limitations, it was not, despite the fact that New York was the hardest hit in dropped contracts. The charts below give as much information as possible. The volumes of milk are estimates.

Total contracts lost since July 2021

State	Number of Farms	Estimated Annual Volume of milk in million pounds
Vermont Farms	28	25.8
New Hampshire	2	1.5
Maine	13	10
New York	92	21.8
Total	135	59.2

New York Horizon Organic Terminated Contracts
County	Number of farms	Estimated Total lbs./pickup*
Franklin	11	24,709
St. Lawrence	17	12,899
Washington	18	20,865
Total	46	58,473
Data was provided by the New York State Department of Agriculture and Markets on September 16, 2021. *Pickups occur every other day. This amounts to estimated 1-2 truckloads every other day.

New York Maple Hill Terminated Contracts
Region	Number of Farms	Estimated Average lbs./Month
Central NY	10	251,870
Northern NY	27	531,737
Eastern NY	9	146,635
Total	46	930,242
Data was provided by the New York State Department of Agriculture and Markets on November 23, 2021.

There are now three contract termination timelines in the Northeast where farmers will be without a market:

1. 1. Maple Hill has put 21 farmers on notice for effective termination on December 2021.
   2. Maple Hill has put a secondary group of 25 farms on notice effective May 2022.
   3. Horizon originally had 89 farms on notice for August 31, 2022. Horizon has now offered a 6 month extension extending the original termination date from August 2022 to February 28, 2023.

The major buyer in the region, CROPP Cooperative, is being very transparent in their process of looking at which farms they can bring on board and how they are making decisions. Obviously, each farm is different and has different conditions they need to meet.

The most recent update from CROPP is:

• CROPP Pools staff is evaluating all 135 dropped farms and it will be done in three phases.
  1. In November, CROPP field staff did on-farm evaluations for anyone in the Maple Hill December 2021 termination group that was interested in talking with them.
     • They reviewed compliance with CROPP policies and standards along routing impacts.
     • This information was shared with the CROPP Board of Directors at their November meeting.
     • FIVE of these farms joined CROPP as reserve pool members[1] in January 2022, on organic routes.
  2. The next group that CROPP evaluated was Maple Hill Group 2 as well as any Horizon Farms that have expressed interest in being Grassmilk producers. Demand continues to expand on Grassmilk, creating a need for additional Grassmilk supply.
     • Evaluations were completed on these farms in December.
     • FIVE farms (3 Maple Hill – NY and 2 Horizon – VT) have been approved for joining the cooperative.
     • There is an additional 3 farms that have been held from consideration due to milk quality. Since these could be routed to Grassmilk, CROPP plan on working with these farms to see if they can improve milk quality between now and their notice period.
     • Start dates will be determined for this group on notice periods (i.e. may be up to 30 days) and meeting our expectations (i.e. Horizon farms need to get OPT certified; filling out paperwork for cooperative membership, etc.).
  3. The next group that CROPP will evaluate is the remainder of the Horizon terminated farms.
     • CROPP expect to have these farm evaluations completed by the end of January.
     • Review of compliance and routing will happen in February.
     • This will include reviewing any of the following farms:
       • Those listed in Maple Hill Group 2
       • The Horizon Grassmilk that weren’t a good fit for Grassmilk
       • Those that didn’t fit into the Grassmilk pick-up routes.

Any terminated farmer that hasn’t been visited or contacted by February 1st 2022 should reach out to the regional pool member in the area or call CROPP. Their Farmer Hotline is: 1-888-809-9297, Monday - Friday, 7 a.m. to 5 p.m. Central or email farmerhotline@organicvalley.com

After finalizing the review of compliance and routing, the CROPP team, headed by Travis Forgues, Executive Vice President of Membership, will be bringing a recommendation to the CROPP Board of Directors on the balance of the milk supply to demand, and projections on how and when they will be able to move forward with taking on new farmers. It is their hope that they will be able to get more information out to farmers by the end of March.

The process may seem slow but there are many considerations that need to be in place, including the interest of existing CROPP members in the region, many of whom have only recently stopped being on a quota. In emailing this update, Travis Forgues has emphasized that he and the Cooperative understand the stress on the farmers waiting for a decision. However, if folks are looking for concrete decisions, he believes it is better to continue to follow their systematic process and not make any promises he is not able to keep. Overall, CROPP is happy to have been able to offer membership to the farmers that were on the most dire timelines. They remain committed to doing all they can to help the farmers that are in flux through these difficult events and will continue to be working to find solutions.

Stonyfield/Lactalis have identified and spoken with a limited number of farms in Vermont and New Hampshire that they believe will work in their direct supply based on many different parameters that include quality, volume, and proximity to their current hauling infrastructure. They are also working on the processing side to expand capacity at their Londonderry plant so they can bring in more regional milk, either through their direct supply or through their agreement with CROPP.

There was no comment from Maple Hill on what farms they are working with as the newsletter was going to press.

[1] From Travis Forgues “CROPP reserve pool agreements are very similar to their member agreements. The members have all the same rights commitment from the cooperative. One big difference is that reserve pool members don’t need to put in equity until becoming full members. Also, in this particular agreement, because of the risk of bring on supply right now, there is a utilization rate given. So the farmers that join the reserve pool will get the same pay for the region as the other CROPP farmers, but will have a 95% utilization pay instead of the 100% to give some additional risk mitigation. As we move forward, it’s our intent to move to full membership as soon as possible”